MGT 301 Test 3

Characteristics of Effective Compensation Systems

1. Enables an organization to attract and retain qualified, competent workers 2. Motivates employees' performance, fosters a feeling of equity, and provides direction to their efforts 3. Supports, communicates, and reinforces an organization's culture, values, and competitive strategy, especially long-term strategy 4. Its cost structure reflects the organization's ability to pay 5. Complies with all government laws and regulations

Orientation: Four-Step Program

1. Mail a personal note of welcome to new employees 2. Send employee handbooks, information on benefits, maps, and other information on the area, company programs, and a resume of work projects being accomplished by department personnel 3. Personally call the new employee to answer any questions he/she may have regarding the materials already sent. 4. Call the new employee the night before the first workday

Reasons why workers join Unions

1. Perceptions of the Work Environment- dissatisfaction with the work environment, including working conditions, compensation, and supervision 2. Perceptions of Influence- a desire to have more influence in effecting change in the work environment 3. Belief of Unions- employee beliefs regarding the potential benefits of unions

Exceptions to Employment-at-will Doctrine

1. Public policy 2. Implied Contracts 3. Tort Theories

Equal Pay Act: Establishment

A distinct physical place of business rather than an entire business or enterprise consisting of several places of business. The prohibition against compensation discrimination under the EPA applies only to jobs within an establishment.

Trends in Compensation

1. Dramatic increase in diversity of compensation strategies and practices. Today, firms are providing variable pay, hiring bonuses, lump-sum recognition bonuses, group incentive plans, broad-based success-sharing programs, plus a broader and more flexible selection of employee benefits 2. Significant rise in pay inequity. Chief executives' avg. compensation has more than tripled 3. Pay is being used to communicate major change (particularly during and after major downsizing and re-engineering efforts)

Point-Factor Plan

A variety of factors are the basis for determining relative worth. Most widely used approach to job evaluation in the U.S. and Europe. In choosing factors the organization decides: "What particular job components do we value? What job characteristics will we pay for?" Factors should be chosen on the basis of the organization's strategy, that reflect the type of work performed, and that are generally acceptable to its stakeholders. Skill, effort, responsibility, and working conditions are the most common factors.

Contemporary IssuesRelated to Health and Safety

AIDS in the workplace, drugs in the workplace, smoking in the workplace, violence in the workplace (increasing in frequency and severity. Homicide is the second leading cause of death in the workplace. Fighting or bullying), ergonomics, occupational stress

Occupational Safety and Health Administration (OSHA)

Created in 1970 within the U.S. Department of Labor, and was designed to reduce occupational diseases and on-the-job injuries. Aims to ensure employee safety and health in the United States by working with employers and employees to create better working environments. Mission is to prevent work-related injuries, illnesses, and deaths.

Privacy Act of 1947

External force in the ongoing working relationship. Established protection against the use of employment records for purposes other than business functioning. Applying only to federal organizations, this statute allows employees to review, amend, and bring civil suit for misuse of their employment records.

Concessionary Bargaining

Involves a union's giving back to management some of what it has gained in previous bargaining. Usually this is prompted by labor leaders who recognize the need to assist the employers in reducing operating costs in order to prevent layoffs, plant closings, or even bankruptcy. Often motivated by economic adversity.

Arbitration Process

Involves bringing in an impartial third party, who is mutually agreed upon by both parties to break the deadlock between the union and management, and their role is to make a ruling that is "final and binding upon both parties." Typically provided as the last step in the grievance procedure in almost all labor agreements. Should be the last resort after all other options in the grievance process have failed.

Job Ranking

Involves placing jobs in order from most valuable to least valuable using a single factor such as job complexity or the importance of the job to the firm's competitive advantage. Typically looks at each job as a whole and does not examine the tasks that make up the job. Simplest method, but is seldom the recommended approach.

Primary Boycott

Involves the refusal of the union to allow members to patronize a business where there is a labor dispute. In most cases, these are legal.

Institutionalized Socialization

It is formal; that is, each member of the organization receives the same, sequential, fixed information upon organizational entry.

Analyze the Information

Step in finding external equity. Organizations can look at competitor pay data only very generally, using average salaries or median starting salaries, or some other index that it believes to be meaningful, to guide its decision making about its own pay policies. Organizations can also analyze data using least-squares regression analysis to aggregate data across jobs and across companies. Analysis should be based on its own individual needs, the complexity of its marketplace, the amount of time the organization can afford to allocate to the project, the professional expertise that is available within the organization, and the resources that it is able and winning to spend for outside advice and assistance.

Socialization

Process by which an individual comes to appreciate the values, abilities, expected behaviors, and social knowledge essential for assuming an organizational role and for participating as an organization member. Is commonly thought of as a learning process, takes place over time, and is not a discrete event. Part of organizational entry

Pay Equity or Comparable Worth Policy

Requires a pay structure that is based on an internal assessment of job worth through job evaluation or "policy capturing" study. It has been proposed as a means of eliminating gender and (occasionally) racial discrimination in the wage-setting process.

Distributive Justice

Requires equity in the allocation of rewards or penalties given by the organization. The ratio of inputs to outcomes for one individual is equitable to that of another.

Grievances: Non-unionized Organizations

The extensiveness of the grievance procedure varies, although there is a trend toward detailed procedures in large organizations. Often involve some sort of peer review process where peer reviews are typically done by a group of organizational members using a process described in the employee handbook. May provide for formal mediation and arbitration as final steps

Organizational Exit: Resignation

The formal act of voluntarily giving up or quitting one's office or position. This is a form of voluntary turnover. When employees do leave, organizations often conduct exit interviews or dispute post-employment surveys in order to assess the reasons for voluntary turnover.

Worker's Compensation: Reasons an employer may contest a claim

The injury (or illness) is not a result of the work, employee was intoxicated or under the influence of drugs, the employee is capable of performing the job despite the injury or illness, or the employee has made a fraudulent claim

Programs to Reduce Accidents at Work: Employee Training

Research clearly shows that workers who receive more safety training suffer fewer work-related injuries than others. The most effective training "allows employees to acquire greater competencies to control their work, leading them to perform their job more safely. To be maximally effective, training must extend beyond the mere provision of knowledge related to how to do one's job safely. Employees must also be empowered to use new skills following training."

Organizational Justice: Reasons to treat people fairly

Research has shown that perceptions of justice impact organizational outcomes such as productivity, absences and turnover, accident rates and health costs, and theft from the organization.

Procedural Justice

Results from a perception of fair rules, laws, or policies that allocate valued rewards and punishments. This type of justice refers to the underlying manner in which policy was established and its fair execution.

Collect Salary

Step in finding external equity. Organization should decide what sources it will use for gathering market data. The least expensive and quickest approach is to obtain data from public sources, such as local chambers of commerce, the U.S. Department of Labor, and various other state and local agencies. Another alternative is to purchase a survey from a consulting firm, or an organization can also conduct its own survey or can contract with an outside firm to conduct a survey on its behalf.

Picketing

Tool a labor union can use to motivate an employer to reach an agreement. Used by employees on strike to advertise their dispute with management and to discourage others from entering or leaving the premises. Usually takes place at the plant or company entrances. Can result in severe financial losses for a firm and eventually can lead to a shut down of the plant. Can become very emotional at times, especially when employees or replacements attempt to cross them.

Short and Long-Term Measures of Performance

Top executives have both short- and long-term performance incentives. Managers and executives have a wider area f discretion in making decisions that affect the firm and as a consequence, the PFP system is designed to reinforce a sense of commitment to the organization. The dangers of high risk for short-term rewards. Stock options should be used for long-term rewards

Going-rate Approach

Traditional approach in international compensation. Also known as the market-rate approach. Pay is linked to the prevailing pay in the local area.

Balance Sheet Approach

Traditional approach in international compensation. Goal is "to keep the expatriate whole." This usually means that pay equity focuses on other home-country colleagues and compensating the individual for the additional costs of an international assignment.

Broadbanding Disadvantages

Traditional cost control in pay structure is lost. Job pricing may be more difficult. May be more difficult to communicate to employees

Employee Assistance Programs

Typically provide counseling, diagnosis, and treatment for substance abuse, family and martial problems, depression, and financial and other personal difficulties.

Wellness Programs

Typically used in two ways: (1) to educate employees to make informed decisions about their lifestyles and their health care (2) to challenge employees' belief that employers are responsible for their health and for paying all their medical care costs.

Worker's Compensation

Typically, this provides for medical expenses and pay due to lost work time in cases where the illness or injury is work-related. Primary purpose is to provide for benefits to injured or ill workers on a no-fault basis and thus to eliminate the costly lawsuits. Programs are managed solely by the states with no direct federal involvement or mandatory standards.

Recommendations for Merit Pay Plans

1) Use a bonus system in which merit pay is not tied to the base salary 2) Maintain bonus range from 0 to 40% 3) Involve workers in decision making 4) Hold raters accountable for their appraisals/ provide training 5) Focus on key organizational factors 6) Include group and team performance in evaluation; use multiple raters 7) Consider special awards separately

Steps in Traditional Job Evaluation

1. Conduct job analysis 2. Rate/rank the job 3. Review job evaluation results

Examples of Contingency Factors Affecting Pay Importance: Situational Contingencies

1) Pay is more important in job choice when pay varies widely across employers than when pay is relatively more uniform. 2)There is a declining marginal utility to additional increments of pay. 3) Importance of pay is likely to rise after changes are made to pay systems. 4) Employee reactions depend heavily on communication of the reasons for pay policies and changes. 5) Pay is probably more important in job choice than in decisions to quit. 6) Pay will do little to motivate performance in systems where people receive similar pay increases regardless of individual or firm performance.

Examples of Contingency Factors Affecting Pay Importance: Individual Difference Contingencies

1) Pay is more important to extroverts than to introverts. 2) Receiving performance-based pay is more important to high academic achievers than to others. 3) High-performance employees are particularly sensitive to whether their higher performance is rewarded with above-average pay increases; low performers prefer low contingency pay systems. 4) Pay appears to be more important to men than to women. 5) People with high need for achievement and higher feelings of self-efficacy prefer pay systems that more closely link pay to performance.

Major Reasons for failure of PFP Systems

1) Poor perceived connection between performance and pay. 2) The level of performance-based pay is too low relative to base pay. The cost of more highly motivating programs may be prohibitive. 3) Lack of objective, countable results for most jobs, requiring the use of performance ratings. 4) Faulty performance appraisal systems, with poor cooperation from managers, leniency bias in the appraisals, and resistance to change. 5) Union resistance to such systems and to change in general. 6) Poor (or negative) relationship between rewarded outcomes and corporate performance measures

Unique characteristics of US Labor Relations

1) U.S. has one union for any worker, Europe may have more than one. 2) In U.S. government is passive in labor relations, most of world government is active in labor. 3) U.S. more adversarial between union and management. 4) Collective bargaining is more centralized in other places in world. 5) U.S. emphasizes economic issues, others political issues. US Managers & Unions: Major cause of expatriate difficulties is not understanding country's union structure and underlying social dimension. Union membership is one of the lowest in the USA. Unions influence multinational corporation decisions

The Equal Pay Act (EPA) exceptions

Pay differentials are legal and permitted when based on: Seniority, merit, quantity or quality of work performance/production, and some factors other than sex (ex: credentials, education, experience)

Process of Forming a Union

1.) Either union membership is solicited by the employees who contact a union or a union might conduct an organizing drive 2.) At least 30% of employees must sign authorization cards that stipulate that a particular union should be their representative in negotiating with the employer 3.) The NLRB is petitioned to conduct an election 4.) Assuming the authorization cards are in order, the NLRB sets a date for the election 5.) A secret ballot representative certification (RC) election is held, which requires that a majority of eligible voting workers accept the union.

Pay-for-Performance Potential Disadvantages

1.) PFP systems invite cheating 2.) Short-term measures lead to long-term trouble 3.) One measure can affect performance in other measures 4.) Increased overhead for PFP system(s) 5.) Difficulty in setting performance standards 6.) Employee resistance to change 7.) May lead to conflicts

Strategies for More Effective PFP

1.) Pay the person- people should be paid according to their individual market value--both internal and external. Pricing a job is not good enough. Need to measure knowledge, skills, and competencies of individuals against the external market 2.) Translate business strategy into measures- Individual, team-based, and business-based PFP systems all should have a place in any single organization for any single person. 3.) Individualize the reward system- Individualize the system to fit characteristics of persons the organization wants to attract and retain. Avoid one-size-fits-all PFP systems

Stages of Collective Bargaining

1.) Preparation 2.) Meetings with interested parties 3.) Resolving deadlocks

What does OSHA do?

1.) States encouraged to create own safety programs that adhere to OSHA standards. 2.) Develop and issue standards- standards are practices, means, methods, or processes reasonably necessary to protect workers on the job 3.) Record keeping and reporting- employers with 11 or more employees must maintain records of occupational injuries and illnesses as the occur 4.) Defining Injury or illness 5.) Authority to conduct workplace inspections 6.) Citations and penalties 7.) Provide services- services provided: consultation assistance, voluntary protection programs, and training and education

Issues in Collective Bargaining

1.) Wage-related issues- include topics such as how basic wage rates are determined, cost-of-living adjustments, wage differentials, overtime rates, wage adjustments, and two-tier wage systems 2.) Supplementary economic benefits- includes issues such as pension plans, paid vacations, paid holidays, health insurance plans, dismissal pay, reporting pay, and supplementary unemployment benefits 3.) Institutional issues- consist of the rights and duties of employers, employees, and unions, including union security, check-off procedures, employee stock ownership plans, and quality-of-worklife programs 4.) Administrative issues- include issues such as seniority, employee discipline and discharge procedures, employee health and safety, technological changes, work rules, job security, and training

The Labor Contract

A formal agreement between a union and management that specifies the conditions of employment and the union-management relationship over a mutually agreed upon period of time (typically 2-3 years, but up to 5 years). Specifies what the two parties have agreed upon regarding issues such as wages, benefits, and working conditions. The process involved in reaching this agreement is a complex and difficult job requiring a willingness from both sides to reconcile their differences and compromise their interests. This process is bound to certain "good-faith" guidelines that must be upheld by both parties. The Taft-Harley Act requires that the employer negotiate with the union once the union has been recognized as the employees' representative.

Employee Recognition Programs

A growing number of organizations offer awards to employees for extended service, work-related achievements, and suggestions for improving organizational effectiveness.

Employment-at-will Exceptions: Implied Contracts

A minority of state courts recognize "implied-in-fact" contracts and infer a contractual obligation prohibiting employers from firing at-will employees. These contracts could be: 1) an employer's written discharge procedure or promise of termination only for "just cause" contained in a company document 2) contracts created by the employer's oral representations of job security 3) a covenant of "good faith and fair dealing" that a minority of state courts read into employment agreements prohibiting employers from terminating their employees in bad faith or with malice 4) known as "promissory estoppel," a promise of employment or continued employment in unambiguous terms where the employer can expect and foresee the employer's reliance on the promise, an employee relies on the promise, and the employee has relied on the promise to his injury

National Labor Relations Act of 1935 (NLRA)

Also known as the Wagner Act, formally recognized private sector workers' rights to organize and bargain collectively with representatives of their own choosing. Management cannot interfere, dominate, discriminate, or refuse. Established the National Labor Relations Board (NLRB) to enforce this act and to conduct representation elections. Prevents and corrects unfair labor practices (ULPs). Hears complaints for ULPs. Makes decisions and recommendations regarding ULPs.

Job Classification Disadvantages

Ambiguous, overlapping grade descriptors

Equal Pay Act (EPA) of 1963

Amended the FLSA to include a prohibition against pay differentials based on gender. Men and women must be paid the same when they hold "substantially equal" jobs in terms of skill, effort, responsibility, and working conditions. Also requires that employers maintain detailed records of time worked and pay received by each employee to determine whether or not an organization has complied with the law.

Employment-at-will Exceptions: Public Policy

An employer cannot terminate an employee for engaging in activities that are deemed to be beneficial to the public welfare. Must be defined by a statute, a regulation, a constitutional provision, a "professional code of ethics", or some other tangible foundation. Covers four categories: 1. refusing to commit illegal or unethical acts 2. performing a legal duty (military service or jury duty) 3. exercising legal rights (filing for worker's compensation) 4. whistleblowing

Group Pay-for-Performance

An organization may choose this when it is possible to measure output on an individual basis. This system is preferred when teamwork and cooperation are important, but team members are competing for a set number or amount of awards.

Hay Plan: Accountability

Answerability for action and for the consequences of the action; the measured effect of the job. Three subfactors: 1. Freedom to act (personal control) 2. The impact of the job on end results (direct v. indirect) 3. Magnitude- the general dollar size of areas most affected by this job

Occupational Illness

Any abnormal condition or disorder, other than one resulting from an occupational injury, caused by exposure to environmental factors associated with employment. Included are acute and chronic illnesses or diseases that may be caused by inhalation, absorption, or ingestion of or direct contact with toxic substances or harmful agents. Alcoholism may fall under this if alcoholism was developed as a result of the socializing responsibilities associated with his/her job. All illnesses must be recorded, regardless of severity.

Occupational Injury

Any injury, such as a cut, fracture, sprain, or amputation, that results from a work-related accident or from exposure involving a single incident in the work environment. All must be recorded if they result in the following: death, one or more lost work days, restriction of work or motion, loss of consciousness, transfer to another job, or medical treatment (other than first-aid)

Criticisms of the Arbitration Process

Arbitration can be both expensive and time-consuming.

Basis for Arbitrator's Decision & Award

Arbitrator writes his/her opinion supporting the decision and award. This includes providing a written rationale for the decision, and presents the basic issues of the case, the pertinent facts, the position and arguments of each party, the merits of each position, and the reasons for the case. As a rule of thumb, the arbitrator has 30 days in which to consider the evidence and to prepare a decision. A fair decision and award must be based strictly upon the contract if relevant contract language exists, and an accurate assessment and interpretation of the contractual clauses of the labor agreement. The contract is the final authority. In reaching the decision, an arbitrator must decide if the employee was accorded due process, whether the employer had just cause for any actions taken against the complainant, and to make sure that his/her decision is not based upon precedents established in previous cases, but rather on the facts of the current case.

Interpersonal Justice

Associated with the treatment an employee receives from a supervisor or manager as decisions are being made

Pay Equity

Assumes the traditional method of achieving equity within, but not between, job families is inherently unfair. The theory of "within but not between" assumes that clerical jobs are compared to each other, that skilled trades jobs are compared to each other, and that professional jobs are compared to each other.

Personal Responsibility Clauses

Based on the principle that if employees or their dependents take personal risks, then they should bear additional responsibility for the costs arising from resulting illness or injury. Two most targeted behaviors for plan incentive or disincentive strategies are smoking and seat belt use.

Incentive Plans

Based on units produced. Rely on some countable result- straight piece rate, differential rate, standard hourly rate, commission plans, draw-plus-commission system

Bottom-up Campaigns

Begin when workers become dissatisfied with some aspect of their work and contact a union to request organization.

Merit Pay Plans

Call for a distribution of pay based on appraisal of a worker's performance. Usually folded into the base pay of the recipient and is usually granted as a percentage of a worker's base pay. Most common and perhaps the most troublesome of PFP systems because performance is typically measured by ratings done by supervisors. Most difficult problem is the measurement of performance

Employee Welfare Programs

Category of employee benefits. Discretionary benefit. Programs where the government pays out money to parties who are in need. Plans include health care, wellness programs, personal responsibility clauses, health plan audits, managed care, and life insurance

Time-off Programs

Category of employee benefits. Discretionary plan. The cost of paid time off represents one of the highest benefit costs for employers today. Long-term disability (LTD) coverage typically provides for the replacement of at least some income in the event that an individual contracts a long-term illness or sustains an injury that prevents him/her from working.

Employee Services

Category of employee benefits. Discretionary plan. The most common of these services are education programs, employee assistance programs, employee recognition programs, and child care.

Government-mandated Programs

Category of employee benefits. Legally required programs such as Social Security, unemployment insurance, and worker's compensation.

Does PFP Work?

Characteristics of the individual as well as the PFP system can affect outcomes. Dramatic changes in performance when pay contingent on it; little change in performance when everyone receives a pay increase not tied to performance. Effective systems should be tailored to particular work situations and strategies and enhance the connection between worker effort and desired rewards. Above all, the are effective if they reward performance in those areas most important for the long-term success of the organization.

Common Workplace Injuries and Illnesses

Chemical hazards, Repetitive strain injury (RSI), Job burnout/stress, Slips and falls, Excessive noise, Food poisoning

Grievances: Mediation and Arbitration

Complaints are often first heard by an external mediator who attempts to settle the dispute. If the mediation fails, binding arbitration may follow. With binding arbitration, the complaint is heard by arbitrators, and decisions are then legally binding. Research has shown that arbitration as a dispute resolution tactic is positive from both the employer and the employee perspectives. Employees are more likely to prevail in arbitration than in fully litigated cases.

Allowances

Component of international compensation. Changes in purchasing power due to inflation and exchange rate fluctuations are typically handled with cash allowances. Most organizations provide some type of housing allowance in order to provide a level of comfort to the international worker. Educational allowances provide for a variety of needs and are mainly focused toward the expatriate's children. Relocation allowances typically cover moving, shipping, and storage charges; temporary living expenses; subsidies for major appliance or car purchases; and lease-related charges. Spouse assistance helps offset income lost by an expatriate's spouse as a result of relocating abroad. Home leave allowances encourage the maintenance of ties with family and friends.

Foreign Service Premiums

Component of international compensation. Monetary payments above and beyond base salary that companies offer in order to encourage employees to accept expatriate assignments. Companies typically disburse premiums to expatriates through periodic lump-sum payments in order to remind the individual that the payment is directly tied to the international assignment

Base Salary

Component of international compensation. Represents the amount of cash compensation that will be provided to an individual each pay period, plus it often serves as a reference point for calculating other allowances. May be paid in parent- or host-country currency.

International Pay Scales

Contemporary approach in international compensation. Ties all expatriate pay to some common reference point. Pay remains relatively equivalent regardless of the location of a particular assignment, or the home country of a particular expatriate. Standardizes international compensation and moves it away from an individual, case-by-case focus.

Team Pay

Current trend in compensation. Any form of compensation contingent on group membership or team results.

Pay for knowledge

Current trend in compensation. In these types of plans, employees are paid on the basis of either the degree of specific, technical knowledge they hold or an inventory of knowledge and/or skills they possess. Based on the assumption that knowledge, skill, or competence will be translated into improved employee performance and, ultimately, superior organizational effectiveness.

Broadbanding

Current trend in compensation. Involves consolidating existing pay grades and ranges into fewer, wider bands. Replaces traditional narrow salary ranges. In theory, this is considered to be more consistent with the broader, downsized, flatter organizations that exist today.

Right-to-Work laws

Declare that union security agreements that require membership as a condition of employment are illegal.

Organizational Exit: Retirement

Defined as the exit from an organization position or career path of considerable duration taken by individuals after middle age and taken with the intention of reduced psychological commitment to work thereafter. Influenced by both personal characteristics and economic concerns. Specifically, government policies, individual and family characteristics, and the organization's policies can have an affect on this decision.

Job Evaluation

Defined as the process of assessing the value of each job in relation to other jobs in an organization. Focuses on the duties and responsibilities assigned to do a job. Traditional compensation programs use this to create internal equity among jobs.

Traditional Evaluation

Described as an objective procedure that measures the complexity of the work, the amount of responsibility, and the level of effort required of each position in relation to other positions in the organization. Typically results in a hierarchy of jobs ranked in order of their relative value to the firm. Does not directly consider the credentials or characteristics of the person who occupies the job, or the quality or quantity of the individual's performance.

Taft-Hartley Act of 1947

Designed to limit the power of unions by regulating labor activities allowed under the NLRA. Provided states with the option of enacting right-to-work legislation. Amended the NLRA by describing what constituted unfair labor practices by unions and 1) Restricting the usage of the strike 2) Restricting unions from interfering with workers' right to organize 3) Unions cannot discriminate against non-striking workers

Effective Pay-for-Performance

Determinants are: 1)worker value outcomes 2) outcome is valued relative to other rewards 3) desired performance is measurable 4) worker must be able to control rate of output or quality 5) worker must be capable of increasing output or quality 6) worker must believe that capability to increase exists 7) worker must believe that increased output will result in receiving a reward 8) size of reward must be sufficient to stimulate increased effort 9) performance measures must be compatible with strategic goals for short and long term

Fair Credit Reporting Act (FCRA)

External force in the ongoing working relationship. Amended in 2005, a federal law that regulates how such agencies provide information about consumers. Under this, employers must receive approval from an applicant that any consumer document can be secured and must provide such an approval in writing to the consumer credit agency. If the employer decides to reject the applicant based on some extent of the report, the applicant must be provided a copy of the report before the employer takes any formal action regarding the applicant. This law may also apply to internal investigations of suspected employee misconduct.

Organizational Exit: Termination

Dissolution of the employment relationship that is originated by the organization. Occurs more often for poor performance and misconduct. Consistent unauthorized absences and tardiness are other common reasons, and failure to follow organization policy. Should not be used for vague unsubstantiated reasons, and documentation should inform the decision. Lower-level employees are most often fired due to job performance, insubordination, or failure to comply with written policies and procedures. Managers and other higher-level employees are often fired when there is a lack of fit or a personality characteristic that has resulted in negative organizational outcomes.

Job Classification

Each job is measured against a preexisting set of job classes that have been designed to cover the full range of work that would be performed by federal government employees. Involves comparing a specific position to these generic descriptors and deciding which level fits best. Developed and used by the federal government

Long-term Capital Accumulation Plans

Employees are granted rewards that appreciate over a long period (i.e., 10, 15 years or career), based on annual or long-term company performance. Annual or longer-term performance targets are established, as well as appropriate funding mechanisms. Proper documentation is required which memorializes the design, development, implementation and administration of the plan. Focus participants on the attainment of specific targets, and, many times, may be used in conjunction with other types of Long-Term Incentives.

Defined Contribution Plan

Employer provides a specific dollar amount that is paid to an individual's account each period. Most common type is the 401(k).

Strike vs Costs of Agreeing to Demands

Employer's power in collective bargaining. Considerations that the employer must take into account are: 1) how the employer's actions will affect future negotiations with the union 2) how long the firm and the union can endure a strike 3) whether business can continue during the strike. Since the permanent hiring of replacements has greatly weakened the power of the strike, union members are generally less willing to support a strike.

Use of Organizational Capital

Employer's power in collective bargaining. This enables the employer to decide whether and when to close down the company, the plant, or certain operations within the plant; to transfer operations to another location; or to subcontract out certain jobs.

Pay for knowledge Advantages

Encourages workforce flexibility and enhanced competence. Fewer supervisors needed as employees improve knowledge and skill. Fosters sense of individual empowerment about pay.

Family and Medical Leave Act of 1993 (FMLA)

Entitles all eligible employees to receive unpaid leave for up to 12 weeks per year for specified family and medical emergencies relating to self, spouse, parents, and children. When the employee returns to work, the act requires the employer to place the individual in the same or an equivalent job, with the same pay, benefits, and conditions of employment. During the leave, the employer is required to continue to provide coverage under the health care program on the same basis as it was provided before the leave. In 2008, it was revised to provide up to 26 weeks of leave.

National Labor Relations Board (NLRB)

Established by the NLRA to enforce the Wagner Act and to conduct representation elections. Essentially, the goal is to regulate the processes of organizing and collective bargaining, not necessarily the outcomes. Two primary functions are: 1) prevent and correct unfair labor practices 2) administer certification and decertification elections to determine whether workers choose to be represented.

Main problems with PFP Programs

Expensive to develop and maintain. High initial costs of changeovers required. Employees perceive that rewards are not closely linked to performance. Employees perceive that performance is not accurately measured. The performance rewarded is not related to the firm's objectives. Employees may not have control over performance due to task constraints. Amount of money available is not worth the extra effort in employees' minds.

Employment-at-will Doctrine

External force in the ongoing working relationship. A private institution has the right to terminate its employees, with or without just cause, in the absence of a contract.

PATRIOT Act of 2006

External force in the ongoing working relationship. Allows government officials access to business records and transactions. In some cases, officials are allowed to conduct surveillance in the workplace.

Uniformed Services Employment and Reemployment Rights Act (USERRA)

External force in the ongoing working relationship. Establishes the rights of reservists and members of the National Guard to return to work at the end of their service. Applies to all employers regardless of their size and protects those serving in the U.S. reserve forces of the Army, Navy, Marine Corps, Air Force, Coast Guard, Public Health Service Commissioned Corps, and the National Guard. While on active duty, employees must receive all benefits available to other employees on comparable leaves of absence. Employees also may use accrued vacation while on leave but cannot be forced to do so.

Worker Adjustment and Retraining Notification Act (WARN)

External force in the ongoing working relationship. Requires organizations to give affected employees 60 days written notice when a plant will close or when mass layoffs are expected. Covers employers with more than 100 full-time employees, and its compliance is required when there will be an employment loss of six months or more.

Worker's Compensation

Federally mandated insurance program developed on the theory that work-related accidents and illnesses are costs of doing business that should be paid for by the employer and passed on to the consumer. Federally mandated program based on the concept of liability without fault, which provides that workers who are victims of work-related injury or illness are granted benefits regardless of who is responsible for the accident, injury, or illness. This means that if an organization participates in this system, a worker may not sue the employer for negligence, even if the injury was clearly the employer's fault. Benefits are: Compensation for death, medical, and wage benefits, and trade-off for immediate medical assistance without fault

Health Care Plan Audits

Focus on carefully tracking plan utilization and costs in order to determine whether the organization's health care spending is generally effective. Include examining claims to ensure that benefits are paid accurately and within acceptable time frames, conducting employee surveys about health care and lifestyle issues, tracking which providers are widely used, and making certain that when more than one insurance plan is in effect, benefit payments are correctly coordinated.

Market Pricing Approach

Form of external equity. Bypassing the time and expense of job evaluation and go straight to the marketplace to find wage information they need in order to set pay. Some small companies do this. One of the fastest growing trends in U.S. industry.

Organizational Justice

Fundamental basis for exchanging expectations and responsibilities for employee's performance while making the employee aware of his or her rights as a member of the organization. Four types that affect the employment relationship and predict a number of important work outcomes, including performance and turnover: Distributive justice, Procedural justice, interpersonal justice, and informational justice.

Social Security

Government-mandated program. Under this program, eligible individuals are covered by a comprehensive program of retirement, survivor, disability, and health benefits. Individuals are eligible for retirement benefits in the form of monthly payments when they reach the stipulated age under the program, and provided they have worked long enough to qualify for benefits.

Gain Sharing

Group incentive plan that gives participating employees an incentive allocation based on improved performances. Bottom-Line: Improved productivity and quality. Trend is to use this with other approaches to improving productivity.

Profit Sharing

Group incentive plan that is designed to motivate cost savings by allowing workers to share in benefits of increased profits.

Employee Stock Option Plans (ESOPS)

Group incentive plans that are contracts between a company and its employees that give employees the right to buy a specific number of the company's shares at a fixed price within a certain period of time. Used to compensate, retain, and attract employees.

Defined Benefit Plan

Guarantees a specific retirement payment based on a percentage of preretirement income. Typically, the amount is based on years of service, avg. earnings during a specified time period, and age at time of retirement. The typical target benefit is to replace approximately 50% of an individual's final average pay. In this plan, the employer funds employees' pensions over their working lifetimes.

Negligent Hiring/Retention

Hiring or retaining an employee with a history of violence or who acts in a negligent manner

Pay-for-Performance Potential Advantages

If effective: should lead to lower costs, higher profits, and a higher degree of individual or group motivation. Can provide a more accurate estimate of labor costs as well as prompt workers to make more effective use of their time, supplies, and equipment. Employees should be involved in the developing or changing process of the PFP system. Sound measurement is key.

Stages of Collective Bargaining: Resolving Deadlocks

If neither the organization nor the union is willing to remain flexible and make concessions, then negotiations reach an impasse that can eventually result in a strike on the part of the union or a lockout on the part of management. One way to avoid this is to delay consideration of the more difficult issues until the latter stages of bargaining and, for the time being, simply agree to disagree on the tougher decisions. Another way is for each side to be prepared for offer propositions and to accept alternative solutions to some of the more controversial issues. Another possible way is to bring in a mediator, a neutral third party who reviews the dispute between the two parties and attempts to open up communication channels. Sometimes government intervention is a necessary way to resolve these issues.

Selecting a PFP System

In designing a PFP system, three major questions should be asked: 1) Who should be included in the PFP system? 2) How will performance be measured? 3) Which are the rewards in the incentive system?

Individual Pay-for-Performance

In general, PFP systems are more effective when specific worker contributions can be clearly measured. Can increase competition among workers and may reduce cooperation and teamwork.

Stages of Collective Bargaining: Preparation

In order to do this, one must have a planning strategy. Includes reviewing and diagnosing the mistakes and weaknesses from previous negotiations and gathering information on recent contract settlements in the local area and industry-wide. Also includes gathering data on economic conditions, studying consumer price indices, determining cost-of-living trends, and looking at projections regarding the short-term and long-term financial outlook. Management is likely to come armed with data regarding grievances and arbitration, disciplinary actions, transfers, promotions, layoffs, over time worked, individual performance measures, and wage payments. During this phase of contract negotiations, employers develop a written plan covering their bargaining strategy. The plan takes into account what the employer considers the union's goals to be and the degree to which it is willing to concede on various issues.

Pay-for-Performance: Cheating

Problem with pay-for-performance systems. May or may not be human nature, but is a prominent feature in just about every human endeavor. It is a primordial economic act: getting more for less.

Employment-at-will Exceptions: Tort Theories

Includes the intentional infliction of emotional distress and defamation. Weakest of the exceptions. Employee must assert the employer harassed him/her. The defamation exception stipulates that an employer cannot publish an untrue statement about an employee to a third party

Piece-Rate System

Individual incentive system based on nonrated output. Workers paid per unit of production. Trust is critical, and it needs to measure quality. This is most effective when individual performance can be accurately measured and teamwork or worker collaboration is not important for the desired performance outcomes.

Workplace Injuries and Diseases

Industrial accidents cost the U.S. economy over $120 billion per year. There is some indication of improvement in illness & accident rates. Moderate size organizations (50-249 employees) have more accidents than smaller or larger ones because they have better prevention programs.

Top-down Campaigns

Initiated by the union as a part of a strategy to increase their representation in the area or industry.

Employee Surveys

Internal force in the ongoing working relationship. . Useful in determining satisfaction with programs and gathering feedback about policies and procedures.

Grievances

Internal force in the ongoing working relationship. A formal, written complaint about the way in which the employment relationship is being carried out. Most are specific to the individual filing the complaint, but these can be made on behalf of a group of affected employees. Among the most informal procedures are general open-door policies and commitment on the part of supervisors and managers to promote fair dealing with employees.

Violations of Policy/Discipline

Internal force in the ongoing working relationship. Guiding principles for discipline are: 1) decisions should be based on job-related criteria 2) employees should be treated consistently 3) company policy should be followed 4) communication should be accurate and honest

Employee Handbooks

Internal force in the ongoing working relationship. Purpose of these are to communicate company policies and procedures, establish the mutual agreements between the employee and the organization while avoiding contractual language, explain the company's philosophy, excite and motivate the employees about their jobs, and convey a broader sense of the company mission and vision

Fair Labor Standards Act (FLSA)

Law that focuses on three main areas: minimum wage, overtime pay, and child labor rules. Sets minimum wage, overtime pay requirements, and rules governing child labor. Enacted in 1938. Broadest, most comprehensive legislation that affects base programs.

International Issues: US Managers & Unions

Major cause of expatriate difficulties is not understanding country's union structure and underlying social dimension. Union membership is one of the lowest in the USA. Unions influence multinational corporation decisions

Organization campaigns against unions

Management can communicate with the workers citing harmful effects of unions and hold "captive audience meetings" where workers must listen to management discuss their reasons for not wanting a union.

Team Pay Disadvantages

May demotivate top individual performance. Few existing plans; beginning to emerge

Internal equity

Means that individual employees perceive that their position is treated fairly within a pay program in relation to other jobs in the organization.

Equal Pay Act: Skill

Measured by factors such as the experience, ability, education, and training required to perform the job. The key issue is what skills are required for the job, not what skills the individual employee must have

Organizational Exit: Downsizing

Often used to refer to the elimination of jobs associated with the overall strategy. Name given to the overall organizational strategy to which the layoff may contribute. In some cases, this is undertaken to reduce labor costs and streamline organizational operations. In other cases, this results from mergers and acquisitions in which the resulting company is plagued with redundant functions. Can have devastating effects upon individual employees, both those that were let go and those who haven't, who are called survivors.

Work-Sharing Programs

One alternative to layoffs where employees voluntarily reduce the number of hours or days per week they work in order to cut labor costs while maintaining their gainful employment.

Grievances: Unionized Organizations

Procedure is usually elaborate, drawing on stewards and other union leaders to argue the grievance if it is not rectified through written procedures.

Broadbanding Advantages

More consistent with downsized, flatter organizational structures. Breaks down previous structural pay barriers among jobs to facilitate empowerment, teamwork, etc. Greater flexibility; more useful managerial tool

Discipline

More future oriented than punishment. Its goal is to point the way to more positive and productive behavior rather than to penalize the person for his/her mistakes. Before this takes place, organizational members should attempt to diagnose the problem to be sure that the employee is to blame for the incident

Point-Factor Advantages

More specific and larger number of factors; off-the-shelf plans available (ex: Hay Plan); more precise measurements

Distributive Bargaining

Most common type of bargaining an involves zero-sum negotiation, where, in other words, one side wins and the other side loses. Unions and management have initial offers or demands, target points, resistance points, and settlement ranges. Union employees may try to convince management that they will strike if they don't get the wages or working conditions they desire. Management, in turn, may be willing to ride out the strike, especially if they have cross-trained other workers or have external replacements to fill in for those on strike.

Resolution of Grievances

Most grievances are settled early in the process. Settlement generally occurs after an employee has either presented his/her grievance in writing to the supervisor or appealed to the next higher level. An early settlement is contingent, however, on each side being willing to listen to the other side and discuss the problem in a rational and objective manner. When a grievance does not get settled in the first or second step, it goes to a higher level, often to company representatives and union representatives. Sometimes a mediator will be brought in to resolve the grievance.

Hay plan

Most popular point-factor plan. Major factors are know-how, problem solving, accountability

Managerial and Executive Pay

Negative consequences to widening pay dispersion: Pay dispersion in high-tech firms leads to team performance decrements. Discrepancy between the CEO's pay and top management team increased likelihood that top management teams would leave the organization. Pay dispersion diminishes communication & increases status gaps.

OSHA Enforcement: Inspections

OSHA inspected About 38,000 workplaces in 2007. The states running their own OSHA programs conducted an additional 58,000 inspections. Top priorities are: go to imminent danger situations and actual fatal accident sites, inspect workplaces with valid employee complaints or target industries, and perform random inspections and re-inspections of various work sites.

Negligent Hiring

Occurs when an employee who actually caused the death or injury had a clear history or reputation indicating a propensity to behave in a certain way and this record would have been discoverable by the employer through appropriate due diligence

Collective Bargaining

Occurs when representatives of a labor union meet with management representatives to determine employees' wages and benefits, to create or revise work rules, and to resolve disputes or violations of the labor contract.

Negligent Retention

Occurs where an employer failed to remove an employee from a position of responsibility after it became apparent or should have been apparent that the employee should not have had this responsibility.

Pay for knowledge Disadvantages

Pay costs may get out of control. Unused skills may get rusty. Creating and maintaining skill and competency menus take time and effort. Do we pay for inputs or outcomes?

Stages of Collective Bargaining: Meetings with interested parties

One of the most important objectives is to establish a climate for negotiations, in other words, determining whether the tone of the negotiations is going to be one of mutual trust, one of suspicion with a lot of distortion and misrepresentation, or one of hostility with a lot of name calling and accusations. Used to establish the bargaining authority of each party and determine rules and procedures that will be used throughout the negotiation process. Generally, each side tries to determine how far the other is willing to go in terms of concessions, and the minimum levels each is willing to accept. The union team is first to present its initial proposals where the original union proposal demands are usually more than it expects to end up with. The management negotiation team then states the management case, often presenting unrealistic counter proposals. As negotiation proceeds there is generally movement toward a pattern of agreement. As topics are discussed and considered, mutual concessions are offered, counter proposals are made, and eventually a tentative agreement is reached. In most cases, when a tentative agreement is reached the union members vote on the contract.

Job Ranking Disadvantages

Only general rating of "worth"-not very reliable; doesn't measure differences between jobs

Creating a more positive parting: Retirement

Organizations are working to create a more positive parting by adopting more and more practices to facilitate the transition to non- or reduced-working life. Specifically, more flexible retirement plans allow employees to phase into retirement more slowly. Some organizations are transitioning employees to retirement by using them as volunteers and ambassadors for their own social programs. Typically, even if organizations do not provide flexible retirement options and/or other creative transition programs, they offer some sort of informational programs intended to ease the transition into retirement.

Health Maintenance Organizations (HMOs)

Organizations comprised of health care professionals who provide services on a prepaid basis. Usually hospitals and health care professionals that offer reduced rates based on a contractual arrangement with the organization.

Unions

Organizations that represent employees' interests to management and on almost all critical HR issues.

Hay Plan: Problem Solving

Original "self-starting" thinking required by the job for analyzing, evaluating, creating, and reasoning. Two subfactors: 1. The thinking environment in which problems are solved 2. The thinking challenge of the actual problems typically encountered by the position

Creating a more positive parting: Downsizing and Layoffs

Outplacement programs help discharged employees find new jobs and benefit the organization by reducing legal risks, reducing severance pay and unemployment compensation, preserving morale among survivors, and maintaining a positive public image. Work-sharing programs are an alternative to layoffs.

Burnout

Part of occupational stress. A reflection of emotional exhaustion, depersonalization, and reduced personal accomplishment.

Job Demands

Part of occupational stress. Defined as psychological stressors, such as working too hard or too fast, having too much to do, or having conflicting demands from several sources

Role Conflict

Part of occupational stress. When pressures from two or more sources are exerted such that complying with one source creates greater problems regarding another source.

Role Ambiguity

Part of occupational stress. Workers simply do not understand what is expected on the job or where what is expected is contrary to what they think should be done

Pension

Payment to a retired employee based on the extent and level of employment with the organization. This has two types of plans: defined benefit plans and defined contribution plans.

Health Care Plans

Plans that involve the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. It is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers. It refers to the work done in providing primary care, secondary care and tertiary care, as well as in public health.

Progressive Discipline

Practice where if employees continue to violate policy, discipline should become more and more severe. Steps in this kind of program include: 1) verbal warning 2) written warning copied to supervisor's file 3) written warning copied to HR file 4) suspension or demotion 5) termination

Realistic job Previews (RJPs)

Presentations of relevant, balanced, and unbiased information about the organization, job, and the conditions under which the job candidate will work. Part of organizational entry that may establish a relationship with employees before the individual is actually hired by the organization.

Grievance Procedure

Primary purpose is to determine whether the labor contract has been violated. It is also designed to settle alleged contract violations in as friendly and orderly a fashion as possible, before they become major issues. Other purposes include preventing future grievances from arising, improving communication and cooperation between labor and management, and helping to obtain a better climate of labor relations. It also help to clarify what often is not clear in the contract. Generally establish (1) how the grievance will be initiated (2) the number of steps in the process (3) who will represent each party, and (4) the specified number of working days within which the grievance must be taken to the next step in the hearing

Gain Sharing vs. Profit Sharing

Profit sharing: employees want to be rewarded when profits go up, but not share in the responsibility when profits go down Gain sharing: based on a measure of productivity, not profit Gain sharing: rewards are given out frequently, whereas profit sharing is usually annual and tied to a retirement plan as deferred payment

Selective hiring

Program to reduce accidents at work. Focuses on the fit between employees and their work environment. Achieved through "selective exclusion" of high-risk employees. High-risk applicants are defined as having: 1) histories of drug addiction/alcoholism 2) low levels of emotional maturity/ trustworthiness 3) older vs. younger employees 4) physical characteristics 5) record of accidents or driving citations

Education Programs

Range from literacy programs to tuition refunds for college or graduate school. Some firms offer job-related tuition plans, and some are helping their workers cope with educating their kids.

Compensation

Refers to all forms of financial returns and tangible benefits that employees receive as part of an employment relationship. As the business environment becomes increasingly complex and global, the challenge to create and maintain these programs effectively, given cost constraints, also requires greater professional expertise, organizational understanding, creativity, and vision than ever before

Organizational Exit: Layoffs

Refers to the tactical, physical action of eliminating redundant skills in the organization. This term is typically reserved for manufacturing employees.

Secondary Boycott

Refers to the union trying to induce third parties, such as suppliers and customers, to refrain from any business dealings with an employer with whom it has dispute. This is illegal under the Taft-Hartley Act.

Team Pay Advantages

Reinforces concepts of teams, empowerment. May better communicate and support organization's culture and goals.

Whistleblowing

Reporting misconduct to persons who have the power to take action. Protected by various federal, state, and local laws. Can be internal or external reporting of wrongdoing.

Programs to Reduce Accidents at Work

Selective hiring, employee training, incentive programs, and safety rules and regulations

Integrative Bargaining

Similar to problem-solving sessions in which management and unions are trying to reach a mutually beneficial alternative or a win-win solution. Both the employers and the union try to resolve the conflict to the benefit of both parties. Objective is for both parties to find the common ground between them, to build relationships, and to eliminate the adversarial elements of traditional bargaining.

Job Classification Advantages

Simple, easy to use for large numbers of jobs; one rating scale

Job Ranking Advantages

Simplest method; inexpensive, and easy to understand

Lockout

Source of power for the employer in collective bargaining. The shutting down of operations, usually in anticipation of a strike. Can also be used to fight union slow-downs, damage to property, or violence within the plant. Generally, these are not used very often because they lead to revenue losses for the firm.

Developing Pay Structure

Step in finding external equity. Primarily a matter of organizational philosophy, although marketplace practices are often important to consider in highly competitive situations. Several options are available: 1.) an organization can use a single rate structure in which all employees performing the same work receive the same pay rate. 2.) an organization can use a tenure-based approach that focuses on how long an individual has been employed in a particular job. 3.) some organizations use a combination of tenure-based and a merit-based plan. 4.) Organizations can use a pay system based on productivity 5.) Organizations can use some form of base pay with an incentive opportunity 6.) Many organizations combine elements of these approaches to create their own formal program. The most common traditional pay structure involves grouping similar jobs into pay grades and assigning a salary range, with a minimum, midpoint, and maximum.

Benchmarking

Step in finding external equity. Surveying well-known jobs, with many incumbents, that are strategically important and are structured in such a way that one would expect to find them in the general marketplace.

Hay Plan: Know-how

Sum total of every kind of skill, however acquired, required for acceptable job performance. Three subfactors: 1. Practical procedures, specialized techniques 2. Ability to integrate and harmonize the diversified functions of management 3. Interpersonal skills

Individualized Socialization

Tailored to each individual employee; one employee's induction into his/her organizational role may be very different from that of his/her peers if organizationally sponsored programs are not provided.

Orientation

Term used for the organizationally sponsored, formalized activities associated with an employee's socialization into the organization. Have the specific purpose of reduce involuntary turnover and inform employees of their rights and responsibilities. These programs often include informational training sessions on topics relevant to the newcomer, site tours, and interactions with various organizational members. May also include the assignment of the individual to a mentor.

Informational Justice

The adequacy of the explanations that were provided by supervisors or managers

Equal Pay Act: Effort

The amount of physical or mental exertion needed to perform the job.

Equal Pay Act: Responsibility

The degree of accountability required in performing the job.

Organizational Exit

The dissolution of the employment relationship. Can take many forms: termination, resignation, downsizing and layoffs, and retirement.

Employment Status

The distinction between the classification of an employee. Workers can be classified as full-time employees or contingent workers, including part-time, temporary, contract, and leased workers. In determining if the worker should be considered an employee or a contractor, a full assessment of the circumstances of the working relationship is needed. Specifically, it is important to assess the worker's "right to control."

Organizational Entry

The employment relationship likely begins when an individual enters the selection process for a position or contract with an organization. It is here that individuals begin to form expectations as to how they will be treated. The most fundamental questions at this early stage are the individual's employment status and work arrangement

Punishment

The provision of a negative consequence following a behavior. Focused upon the past and penalizes undesirable behavior

Ergonomics

The science of designing work space and equipment to be as compatible as possible with the physical and psychological limits of people. OSHA has issued voluntary guidelines: "Best Practices" program designed by OSHA- use of program reduced RSI injuries/lost work days RSI (repetitive strain injury) investigated (and enforced) OSHA can (and does) cite employers for ergonomics violations using the "general duty clause"

Current NLA Law regarding Union organizing

There are two ways a union may become the collective bargaining representative of employees: (1) voluntary recognition by the employer (2) a secret ballot election An employer may, but is not required to voluntarily recognize a union and commence negotiations for a contract when a union demonstrates that a majority of the employees support the union.

Disability Benefits

These Social Security benefits are provided only when a disability is expected to endure for at least one year, or is expected to result in death. Individuals must be disabled for six months before they qualify for payments.

Equal Pay Act: Working Conditions

These encompass two factors: (1) physical surroundings like temperature, fumes and ventilation (2) hazards

Team-based Pay-for-Performance

This is a better approach when it is part of a comprehensive team-based model of HRM and compensation.

Work Arrangements

This is a crucial question at the early stage of organizational entry. Specifically, will the new employee work a traditional schedule, or one that is less rigid. Organizations can use programs such as telecommuting, flextime, permanent part-time work, job sharing, and compressed workweeks to help employees balance their work and non-work lives with these more flexible work schedules.

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

This law was enacted in order to provide current and former employees, and their eligible dependents, with a temporary extension of employer-provided group health insurance when coverage would otherwise be lost.

Unemployment Insurance

This program is designed to encourage employers to stabilize their workforces, and it provides emergency income for workers when they are unemployed. Program is jointly managed by the federal government and the states. In terms of payouts under this program, the individual states decide how much to pay, how long to pay, and on what basis they will pay. To be eligible to receive benefits, the worker must have been employed previously in an occupation covered by the insurance, must have been dismissed by the organization, must be actively seeking work, and may not be unemployed due to a labor dispute.

Medicare

This program provides health care benefits to nearly all U.S. citizens aged 65 or older regardless of whether or not they have worked. Also available to individuals receiving Social Security disability benefits after a specified period of time. Part A covers hospitals, Part B is a voluntary and contributory supplement covering medical expenses, Part C provides new health care coverage options to recipients, including managed care plans, medical savings accounts, and Medigap protection to fill the unpaid gaps in Parts A and B, and Part D covers some prescription drug costs.

International Compensation

Three factors that typically influence this are: (1) the expected length of the assignment influences the type and amount of special benefits and allowances (2) the degree of mobility expected of the expatriate (3) the desired reference point to be used for pay equity. Typically has four components: (1) base salary (2) foreign service premiums (3) allowances (4) benefits

Point-Factor Disadvantages

Time-consuming process; more difficult to understand; greater opportunity to disagree

Strike

Tool a labor union can use to motivate an employer to reach an agreement by a simple refusal on the part of the employees to perform their jobs. Occur when the union is unable to obtain an offer from management that is acceptable to its members. Before a union does this, it must first assess the consequences and its members' willingness to make the sacrifices and endure the hardships

Boycotting

Tool a labor union can use to motivate an employer to reach an agreement. Encourages refusing to patronize an employer, refusing to buy or use the employer's products or services. The union hopes that the general public will join and put additional pressure on the employer.

Effects of Unions in The United States

Wage differentials: 15-20%. Those paid the least benefit the most from unions. Union workers have more satisfaction with pay but more dissatisfaction with supervision, co-workers and job content. Evidence is mixed on the effects of unions on productivity. Can affect the bottom line negatively

Warren Farrell in "Why Men Earn More"

Wage gap exists primarily because of the type of work women choose and the number of hours worked. Farrell disputes the arguments attributing the "wage gap" to discrimination. His data indicates men and women with Bachelor's Degrees in 26 job categories have comparable salaries. Women tend to prefer jobs with shorter and more flexible hours to accommodate family responsibilities. Men average 45 hours a week versus women's 42. Men more likely to have dangerous, higher-paying jobs. 92% of occupational deaths are men.

External Equity

When your pay practices are similar to the practices of other organizations competing for the same talent, then your program is said to be competitive. The process of pricing jobs involves identifying the compensation provided by other organizations for jobs similar to yours. Shift focus from an administrative value system to an economic one.

Wage Gap

Women make 78.5 cents for every dollar that a man makes.

Department of Labor "FairPay" Overtime rules Under FLSA

Workers earning less than $23, 660 per year- or $455 a week- are guaranteed overtime protection. In order to qualify for the executive employee exemption, the following tests must be met: 1.) The employer must be compensated on a salary basis at a rate not less than $455 per week 2.) Employee's primary duty must be managing the enterprise, or managing a department of the enterprise 3.) Employee must regularly direct the work of two or more other full-time employees 4.) Employee must have the authority to hire or fire

Occupational Stress

over 50% of surveyed respondents blamed their stress levels on "having to work more than 12 hours a day to get the job done"