BS MGT exam 4

Employee Privacy Rights

-Federal and state courts generally view the privacy rights of employees as minimal. -There is a lack of comprehensive and consistent body of privacy protection, whether from laws or from court decisions.

Federal- or state-mandated insurance

-Funded by an employer payroll tax -Provided to workers to defray the loss of income and cost of treatment due to work-related injuries or illness. -Factors influencing the employer's insurance rate: ~The risk of injury or illness for an occupation ~Each state's level of benefits for injuries sustained by employees varies. ~The company's frequency and severity of employee injuries (the company's experience rating).

Stock Options

-Granting employees the right to purchase a specific number of shares of the company's stock at a guaranteed price (the option price) during a designated time period. -The value of an option is subject to stock market conditions at the time that option is exercised.

Increase in productivity is gained when:

-Greater output is obtained with less or equal input. -Equal production output is obtained with less input.

Requirements For A Successful Plan

-Identify important organizational metrics that encourage employee behavior. -Involve employees. Incentive programs should seem fair to employees. -Find the right incentive payout. Payout formulas should be simple and understandable. -Establish a clear link between performance and payout.

Methods to communicate benefits to employees

-In-house publications (employee handbooks, organizational newsletters, and postings on bulletin boards) -Brochures and enrollment information mailed to employees -Employee meetings and information sessions -Employee meetings with benefits providers such as the representatives of health care companies, the investment company that manages a firm's pension, and so forth. -E-mails with benefit information and enrollments reminders -Blogs -Social media -Payroll inserts and pay stub messages -Benefits hotlines

Preferred Provider Organization (PPO)

-Is a group of physicians establish an organization that guarantees lower healthcare costs to the employer. -Allows employees to select their doctor of choice from a list of participating physicians.

Implied Contract

Wrongful discharge contrary to an employer's oral or written promises of continued employment.

CovenantImplied

Wrongful discharge for a lack of fair dealing on part of employer.

Violations of Public Policy

Wrongful discharge of an employee by an employer for refusal commit an act that to violates the law.

Incentive Plan Purposes

* encourage employees to assume "ownership" of their jobs, thereby improving effort and job performance * motivate employees to expend more effort than under hourly and/or seniority-based compensation systems * support a compensation strategy to attract and retain top-performing employees

Cash-Balance Pension Plans

-Employer contributes a percentage of employee's pay each year. -Account balance earns interest each year. -Experts predict it will replace traditional pension plans.

Payment for Time Not Worked

-Vacations with Pay -Paid Holidays -Sick Leave -Sabbaticals -Severance Pay -Supplemental Unemployment Benefits

Why Incentive Plans Fail

- They fail to meet employee expectations for pay gains. - There is confusion about incentive payment calculations due to poor design and implementation of the plan. - Employees do not have the capability to change their performance levels. - The organization environment does not support plan

Pension Plans

-401(k) Savings Plans -Cash Balance Pension Plans -Federal Regulation of Plans

VestingVesting

-A guarantee of accrued benefits to participants at retirement age, regardless of their employment status at that time. -ERISA requires that plans must provide that employees will have vested rights in their accrued benefits after certain minimum-years-of-service requirements have been met.

401(k) Savings Plans

-A tax-deferred savings plan. -Employees save through payroll deductions. -Employers may match a portion of employee savings

Constructive Discharge

-An employee voluntarily terminates his or her employment because of harsh, unreasonable employment conditions placed on the individual by the employer. -Employers cannot accomplish covertly what they are prohibited by law from achieving overtly. -Courts have generally adopted a "reasonable person" standard for upholding constructive discharge claims.

Profit Sharing

-Any procedure by which an employer pays, or makes available to all regular employees, in addition to their base pay, current or deferred sums based upon the profits of the enterprise. -Challenges:-Agreement over the percentages of shared of profits and the forms of distribution (cash or deferred) of profits between company and employees-Annual variations and possibility of no payout due to financial condition of company-Maintaining motivational connection of profit-sharing to performance of employees

Pointers for designing benefits information

-Avoid complex language when describing benefits. Clear, concise, and understandable language is a must. -Explain the purpose behind a benefit and the value it offers employees. Be up front about the pros and cons of different benefit plans. -Use graphics whenever possible to make the information understandable at a glance. -Provide numerous examples to illustrate how a benefit choice might affect different types of employees, depending upon their personal circumstances.

The Executive Pay Package

-Base salary -Short-term incentives or bonuses -Long-term incentives or stock plans -Benefits -Perquisites (perks)

Competitive Benefits Information

-Chamber of Commerce -Bureau of Labor Statistics -Society of Human Resource Management -HR Consulting Firms -Competitors Web Sites -Internal Information

Whistle-Blowing

-Complaints to governmental agencies by employees about their employers' illegal or immoral acts or illegal practices -Laws Protecting Whistle-Blowers from Retaliation: -Sarbanes-Oxley (S-O) Act of 2002 protects publicly traded company employees -Whistleblower Protection Act (WPA) protects federal employees. -Notification and Federal Employee Antidiscrimination and Retaliation Act (No Fear Act) of 2002

Conduct of an Interview

-Concentrate on how the offense violated the performance and behavior standards of the job. -Avoid getting into personalities or areas unrelated to job performance. -Give the employee must be given a full opportunity to explain his or her side of the issue.

Problems With Piecework Systems

-Is not always an effective motivator -Piecework standards can be difficult to develop. -Individual contributions can be difficult to measure. -Not easily applied to work that is highly mechanized with little employee control over output. -Piecework may conflict with organizational culture (teamwork) and/or group norms ("rate busting"). -When quality is more important than quantity. -When technology changes are frequent.

Drug-Free Workplace Act (1988) requires employers employers to: to:

-Issue a policy statement prohibiting drug usage. -Inform employees about the dangers of drugs. -List options available for drug counseling. -Notify the federal contracting agency of employees convicted of drug-related criminal offenses.

Justifications

-Large financial incentives reward superior performance. -Business competition is pressure-filled and demanding. -Good executive talent is in great demand. -Effective executives create shareholder value.

Health Care Benefits

-Medical Benefits -Dental, optical, and Mental Health Benefits -Value-Based Health Initiatives -Wellness Programs -Disease Management Programs -Employee Assistance Programs -Counseling Services

Employer Responsibilities

-Negligence-Is the failure to use a reasonable amount of care when such failure results in injury to another person. -Negligent hiring-Is a legal doctrine that places liability (duty of care) on the employer for actions of its employees during the course and scope of their employment.

Employee Retirement Income Security Act (ERISA)

-Private pension plans are subject to ERISA regulations that provides standards and controls for pension plans: -Plans must comply IRS tax standards to qualify. -Plans must meet actuarial standards to qualify for Pension Benefit Guarantee (PBGC) insurance. -Plans must meet Department of Labor standards for treatment of plan participants.

Employers can

-Restrict access to information that could violate the privacy of others -Limit the employee to copies of documents that he or she has signed -Require that HR personnel, or a supervisor, be present while the employee views the documents

Legally required employee benefits

-Social Security Insurance -Unemployment Insurance -Workers' Compensation Insurance -COBRA Insurance -Benefits Provided by the Patient Protection and Affordable Care Act (PPACA) -Benefits Provided under the Family and Medical Leave Act (FMLA)

ADR Procedures

-Step-Review Systems -Peer-Review Systems -Open-Door Policy -Ombudsman System -Mediation -Arbitration

Federal payroll tax on employer and employee

-Tax is refunded to states which individually administer unemployment compensation programs. -Benefit weekly amounts vary from state to state.Involuntarily unemployed workers were originally eligible for up to 26 weeks of unemployment benefits. -Benefit is based on an employee's recent earnings. -Unemployed workers are required to seek "suitable employment."

Following are some examples of how an implied contract may become binding:contract may become binding

-Telling employees their jobs are secure as long as they perform satisfactorily and are loyal to the organization -Stating in the employee handbook that employees will not be terminated without the right of defense or access to an appeal procedure -Urging an employee to leave another organization by promising higher wages and benefits, then reneging on those promises after the person has been hired

Other Reform Measures

-The adoption of performance formulas that peg executive compensation to organizational benchmarks other than stock price -Shareholder resolutions that allow shareholders the right to vote on executive pay packages -Greater accountability by compensation committees to justify large executive pay awards or severance or retirement packages

Employment-at-Will Principle

-The right of an employer to fire an employee without giving a reason and the right of an employee to quit when he or she chooses. -In 1908, Supreme Court upheld employment-at-will in Adair v United States.

Employees generally have

-The right to know of the existence of one's personnel file -The right to inspect one's own personnel file -The right to correct inaccurate data in the file

Discharge as a Result of Retaliation

-Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and other employment laws prohibit employers from retaliating against employees when exercising their rights under these statutes. -Proper handling of these employees involves: -Taking no adverse employment action against employees when they file discrimination charges. -Treating the employees consistently and objectively. -Harboring no animosity toward the employees when they file discrimination lawsuits.

An employee's right to present his or her position during a disciplinary action.during a disciplinary action.

-To know job expectations and the consequences of not fulfilling those expectations. -To consistent and predictable management action for the violation of rules. -To fair discipline based on facts, to question those facts, and the right to present a defense. -To appeal disciplinary action. -The right to progressive discipline.

Definitions of Discipline

-Treatment that punishes. -Orderly behavior in an organizational setting. -Training that molds and strengthens desirable conduct or corrects undesirable conduct and develops self-control.

Limitations on Employment-at-Will

-Union collective bargaining agreements -Federal and state laws, court decisions, and administrative rulings "Fear of firing"

Incentive Plans Are Effective

-When incentives are based on actual differences in individual, team, or organizational performance and not seen as entitlements. -When annual incentive budgets are large enough to reward and reinforce exceptional performance. -When overhead costs associated with plan implementation and administration are properly considered beforehand and are controllable.

Incentive Pay Programs

-establish a performance "threshold" to qualify for incentive payments -emphasize a shared focus on organizational objectives -create shared commitment in that every individual contributes to the organizational performance and success

Ombudsman System

-is a designated individual from whom employees may seek counsel for the resolution of their complaints. -Is an advocate for a fair process, not an advocate on behalf of individuals or the institution. -Does not have the power to decide or to overrule a decision, but can confidentially seek an equitable solution between the employee and the supervisor.

Conducting a Discharge Meeting:

1.Come to the point within the first two or three minutes, and list in a logical order all reasons for the termination. 2.Be straightforward and firm, tactful, remain resolute in your decision. 3.Make the discussion private, businesslike, and fairly brief. 4.Don't mix the good with the bad. Trying to sugarcoat the problem sends a mixed message to the employee. 5.Avoid making accusations against the employee and injecting personal feelings into the discussion. 6.Avoid bringing up any personality differences between you and the employee. 7.Provide any information concerning severance pay and the status of benefits and coverage. 8.Explain how employment inquiries from future employers will be handled

Reasons given by supervisors for their failure to impose a disciplinary penalty:

1.The supervisor failed to document earlier actions, so no record existed on which to base subsequent disciplinary action. 2.Supervisors believed they would receive little or no support from higher management for the disciplinary action. 3.The supervisor was uncertain of the facts underlying the situation requiring disciplinary action. 4.Failure by the supervisor to discipline employees in the past for a certain infraction caused the supervisor to forgo current disciplinary action in order to appear consistent. 5.The supervisor wanted to be seen as a likable person.

Combined Salary and Commission Plan

A compensation plan that includes a straight salary and a commission component ("leverage"). ~Advantages:-Combines the advantages of straight salary and straight commission forms of compensation.-Offers greater design flexibility-Can be used to develop the most favorable ratio of selling expense to sales.-Motivates sales force to achieve specific company marketing objectives in addition to sales volume.

Differential Piece Rate

A compensation rate under which employees whose production exceeds the standard amount of output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard amount

Peer-Review System

A group composed of equal numbers of employee representatives and management appointees.Functions as a jury since its members weigh evidence, consider arguments, and after deliberation, vote independently to render a final decision.

Open-Door Policy

A policy of settling grievances that identifies various levels of management above the immediate supervisor for employee contact.

Provisions

An employer must grant an eligible employee up to 12 workweeks of unpaid leave in a 12-month period for the following reasons:-Birth of and care for a newborn child. -Adoption or foster care placement of a child. -Care for an immediate family member -Serious health condition of the employee. -Employees retain their health benefits and have the right to return to their job or an "equivalent job." -Those caring for service members are entitled to up to 26 weeks of leave

Standard Hour Plan

An incentive plan that sets rates based on the completion of a job in a predetermined standard time

Straight Piecework

An incentive plan under which employees receive a certain rate for each unit produced

Noncash Incentive Awards

Are most effective as motivators when the award is combined with a meaningful employee recognition program.

Flexible Benefits Plans (Cafeteria Plans)

Benefit plans that enable individual employees to choose the benefits that are best suited to their particular needs. -A basic or core benefits package of life and health insurance, sick leave, and vacation ensures that employees have a minimum level of coverage. -Employees use "credits" to "buy" whatever other benefits they need.

Child and Elder Care

Care provided to a child or an elderly relative by an employee who remains actively at work.

Straight Commission Plan

Compensation plan based upon a percentage of sales. -Draw: is a cash advance that must be paid back as commissions are earned. ~Disadvantages:-Salespeople will stress high-priced products.-Customer service after the sale is likely to be neglected.-Earnings tend to fluctuate widely between good and poor periods of business, an turnover of trained sales employees tends to increase in poor periods.-Salespeople are tempted to grant price concessions.

Straight Salary Plan

Compensation plan that permits salespeople to be paid for performing various duties that are not reflected immediately in their sales volume. ~Advantages:-Encourages building customer relationships.-Provides compensation during periods of poor sales. ~Disadvantage:-May not provide sufficient motivation for maximizing sales volume.

Team Incentive Plans

Compensation plans where all team members receive an incentive bonus payment when production or service standards are met or exceeded

"ADR"

Different types of employee complaint or dispute-resolution procedures used to meet employees' expectations for fair treatment in the workplace while guaranteeing them due process.

Contributory plan

Contributions to a plan are made jointly by employees and employers.

Noncontributory plan

Contributions to a plan are made solely by the employer.

Positive, or Non-punitive, Discipline

Discipline that focuses on the early correction of employee misconduct, with the employee taking total responsibility for correcting the problem.

Safety-Sensitive Jobs

Employees must submit to a drug test when "reasonable suspicion" for a drug test exists and the employer's testing procedures are also reasonable.

E-Mail, Internet, and Computer Use

Employers can monitor what employees do online and fire or discipline them based on that information

Camera Surveillance

Few federal laws protect workers from being watched

Improshare

Gainsharing based on increases in productivity of the standard hour output of work teams.

Health Insurance Portability and Accountability Act (HIPAA) of 1996

Grants employees the right to switch medical insurance between former and present employers with no gap in coverage regardless of preexisting health condition once the employees have earned twelve service credits at the former employee

Merit Guidelines

Guidelines for awarding merit raises that are tied to performance objectives.

Phone Conversations and Text Communications

In general, employers have the right to monitor calls and text messages sent from their telecommunications devices, provided they do so for compelling business reasons and employees have been informed that their communications will be monitored.

Pension Plans and Underfunding

Inadequate funds to cover retirement obligations along with pension plan failures could overwhelm the PBGC.

Bonus

Incentive payment that is supplemental to the base wage for cost reduction, quality improvement, or other performance criteria.

Disadvantages

Individual team members may perceive that "their" efforts contribute little to team success or to the attainment of the incentive bonus. -Intergroup social problems—pressure to limit performance and the "free-ride" effect may arise. -Complex payout formulas can be difficult for team members to understand.

Psychological contract

Is the expectation of a fair exchange of employment obligations between an employee and employe

Merit Pay Program (Merit Raise)

Links an increase in base pay to how successfully an employee achieved some objective performance standard.

The Consolidated Omnibus Budget Reconciliation Act of of 1986 (COBRA)1986 (COBRA

Mandates that employers make health coverage—at the same rate the employer would pay—available to employees, their spouses, and their dependents on termination of employment, death, or divorce. -The coverage must be offered for between 18 and 36 months depending on qualifying guidelines.

Awards

Often used to recognize productivity gains, special contributions or achievements, and service to the organization.

Health Maintenance Organizations (HMOs)

Organizations of physicians and health-care professionals that provide a wide range of services to subscribers and dependents on a prepaid basis.

Off-Duty Employee ConductOff-Duty Employee

Organizations that discipline employees for off-duty misconduct must establish a clear relationship between the misconduct and its negative effect on other employees or the organization.

Retirement ProgramsRetirement Programs

Preretirement and Phased Retirement Programs

Gainsharing Plans

Programs under which both employees and the organization share the financial gains according to a predetermined formula that reflects improved productivity and profitability.

Workers' Adjustment Retraining and Notification Act (WARN) of 1989Act (WARN) of 198

Requires organizations with more than 100 employees to give employees and their communities sixty days' notice of any closure or layoff affecting fifty or more full-time employees.-Terminated employees must be notified individually in writing. -The act allows several exemptions, including "unforeseeable circumstances."

Scanlon Plan

Rewards come from employee participation in improving productivity and reducing costs.

Employee Assistance Programs (EAPs)

Services provided by employers to help workers cope with a wide variety of problems that interfere with the way they perform their jobs. -Typically provide diagnosis, counseling, and referral for advice or treatment for problems related to alcohol or drug abuse, emotional difficulties, and financial or family difficulties.

Establishing Team Incentive Payments

Set performance measures upon which incentive payments are based -Determine the size of the incentive bonus. -Create a payout formula and fully explain to employees how payouts will be distributed.

Off-Duty Employee Speech

Some organizations have social networking and blogging policies that restrict employees from making disparaging remarks about their firms or its supervisors, or otherwise casting their organizations in a bad light.

Employee Stock Ownership Plans (ESOPs)

Stock plans in which an organization contributes shares of its stock to an established trust for the purpose of stock purchases by its employees.

Workplace Romances

Supervisor - subordinate relationships are of particular concern

Step-Review System

System for reviewing employee complaints and disputes by successively higher levels of management.

Advantages

Team incentives support group planning and problem solving, thereby building a team culture. -The contributions of individual employees depend on group cooperation. -Team incentives can broaden the scope of the contribution that employees are motivated to make. -Team bonuses tend to reduce employee jealousies and complaints over "tight" or "loose" individual standards. -Team incentives encourage cross-training and the acquiring of new interpersonal competencies.

Current Reform Measures

The Internal Revenue Service (IRS) is looking for tax-code violations in executive pay packages and will make executive pay a part of corporate audits. -The Securities and Exchange Commission issued pay disclosure rules which require companies listed on the New York Stock Exchange and NASDAQ to disclose the true size of their top executive pay packages. -The Financial Accounting Standards Board (FASB) now requires that stock options be recognized as an expense on income statements.

NLRB v Weingarten,Inc.

The Supreme Court upheld an NLRB ruling in favor of the employee's right to representation during an investigative interview in a unionized organization.

Defined-benefit plan

The amount an employee is to receive upon retirement is specifically set forth.

Defined-contribution plan

The basis (amount) an employer contributes to the pension fund is specified.

Incentive Plan Effectiveness

There is evidence of a relationship between incentive plans and improved organizational performance

Variable Pay

Tying pay to some measure of individual, group, or organizational performance

Spot Bonus

Unplanned bonus given for employee effort unrelated to an established performance measure.

Employee Rights

Various federal and state laws in protection of employment status guarantee fair treatment of employees by employers.

Progressive Discipline

When applying corrective measures by increasing degrees, always be sure that employees: -Know where they stand regarding offenses. -Know what improvement is expected of them. -Understand what happens next if improvement is not made.