HR. Final
Pay differences
Two employees who do the same job cannot be paid a different wage because of race or age. Onlife if their age differences in their experience skills, seniority or job performance are there legal reasons why their pay may be different.
Employers should also establish policies for leave without pay- ex: abstinence to pursue non work goals or to meet family needs.
Unpaid leave is a benefit, pto on specific days in addition to that thing i have here.
Family medical leave
Up to 12 weeks unpaid leave for childbirth, adoption or serious illness.
Paid leaveq
Vacations and holidays
Compa- ratio formula
(Average )/ (midpoint) OR (employee salary/ midpoint of salary range)
Unemployment insurnace
- Federally mandated program administered by states to minimize unemployment hardships. - Most funding comes from federal and state taxes on employers. - Size of unemployment tax imposing on each employer depends on the employer's experience rating. - Careful HR planning can minimize layoffs and keep their experience rating favorable.
Worker's compensation major categories
1. Disability income 2. Medical care 3. Death benefits 4. Rhabilitive benefits
Four categories of a balance scorecard include
1. Financial, 2. Customer, 3/ Internal, 4. Learning growth.
Issues in Developing a Pay Structure
1. Legal Requirements 2. Market Forces 3. Organization's Goals Lead to Pay level decisions
To receive benefits of unemployment insurance they must meet contitions
1. They meet requirements demonstrating they had been employed. 2. They are available for work. 3. They are actively seeking work. 4. They were not discharged for cause, did not quit voluntarily, and are not out of work because of a labor dispute.
Three judgesticks of fairness
1. WHat they think employees in other organizations earn for doing the same job (external Equity). 2. What they think other employees holding different jobs within the organization earn for doing work at the same or different levels (internal equity). 3. What they think employees in the organizations earn for doing the same job as theirs (individual equity).
Compensable factors
5 characteristics of a job that the organization values and chooses to pay for: 1. Experience 2. Education 3. Complexity 4. Working condition 5. Responsibility
Medical insurance
70% of all full time employees in U.S. receive health insurance benefits, Policies typically cover: Hospital expenses surgery visits to physician . Additional coverage may include: Dental care, vision care, prescription drug programs.
Merit Pay
A system of liking pay increases to ratings on performance appraisals. Use merit increase grid (individuals performance rating, individual compa- ratio).
Piecework rate
A wage based on the amount an employee produces
Balance scre card
A combimation of performace measurments directed toward the company's long- and short terem goals, and used as basis for awaarding incentive pay.
Benchmarking
A procedure in which an organization compares its own practices against those of successful competitors pay surveys.
Pay ranges
A set of possible pay rates defined by a minimum, maxiumom, and midpoint of pay for employees holding a particular job or job wihtin a particular pay grade.
average salary of employees
Add all the salaries in the pay grade and divide by the amount of salaries there.
Job evaluation
Administrative procedure for measuring relative internal worth of the organization's jobs.
LO 12-5 Explain how organizations design pay structures related to jobs. Powerpoint
Along with market forces and principles of fairness, organizations consider the relative contribution each job should make to the organization's overall performance. Creation of pay structure requires that the organization develop an internal structure showing the relative contribution of it various jobs. One typical way of doing this is job evaluation.
Premiums
Amount employees pay each month for health insurance
Standard hour plan
An incentive plan that pays workers extra for work done in less than a present "standard time". Similar to piecework plans.
LO 12-3 Discuss how economic forces influence decisions about pay. Powerpoint
An organization cannot make spending decision independent of the economy. Organizations must keep cost low enough that they can sell their products profitably, yet they must be able to attract workers in a competitive labor market. Workers prefer higher- paying jobs and avoid employers that offer less money for the same type of job. In this way, competition for labor establishes the minimum, employees will look for jobs with other organizations.
Determining Merit budgets
Company strategy, inflation rate, company performance, industry peer groups, turnover rate (by job group), geographic peer groups
Allocating Merit Increaes
As a manager you are given a merit budget for your department to allocate yout employees (merit pool). It normally represents a percentage of your overall salary budget. For instance, if the salaries of everyone in your department equals $500,000 and there is a 3% pool, you are given $15,000 to distribute as base pay increases.
LO 14-1 powerpoints Discuss the importance of benefits as a part of employee compensation
As part of the total compensation paid to employees, benefits serve functions similar to pay. Different employees look for different types of benefits. Employers need to examine their benefits package regularly to see whether they meet the needs of today. At the same time, benefits packages are more complex than pay structures, so benefits are harder for employees to understand and appreciate. even if employers spend large sum on benefits, if employees do not understand how to use them or why they are valuable, the cost of the benefits is largely wasted.
Pay level
Average amount the organization pays for a particular job.
LO 13-7 Discuss issues related to performance-based pay for executives.
Because executives have a much stronger influence over the organization's performance than other employees do, incentive pay for executives warrants special attention. Researchers have tried in vain to find a link between the size of CEOs' incentive pay and companies' performance in terms of profits or other financial measures. In an analysis of CEO pay at 300 large U.S.-traded companies, none of the 10 top-paid CEOs worked for companies that attained the top 10% in terms of performance, even though their pay far exceeded the median. And in a study that compared historical CEO pay with the companies' performance over the following three years, CEOs who earned in the top 10% saw their companies do increasingly worse than others over the three years that followed. A corporation's
LO 12-1 powerpoint: Identify the kinds of decisions involved in establishing a pay structure.
Because pay is important both in its effect on employees and on account of its cost organizations need to plan what they will pay employees in each job. Pay policies and practices in the United States are subject to government laws and regulations. Just as competing businesses may not conspire to set prices, they may not conspire to set wage rates.
Role of employee benefits
Benefits contribute to attracting, retaining and motivating employees. Help employers tailor their compensation to kinds of employees they need. Employees have come to expect that benefits will help them maintain economic security benefits impose significant costs
Calculating overtime pay
Bob is a non- exempt employee and earns $15 an hour. Bob works 44 hours in one week. Bob earns 40 hours pay t $15 per hour. Bob earns 4 hours pay at $22.50 per hour ($15 x 1.5). Bob total wages for the week are $600 (40 x $15) plus $90 ($22.50 x4) for a total income of $690
Organizations that help you benchmark
Bureau of labor statistics (BLS) Society for Human Resource Management (SHRM) WoldatWork
Sales commissions
Commissions- incentive pay calculated as a percentage of sales, Some earn a commission in addition to a base salary. Straight commission plan- some earn commision only. (Some earn no commission at all, but straight salary)
Judging fairness
Employees compare their pay and contributions against three yardsticks.
The organization establishes a minimum, maximum, and midpoint of pay for a job with a particular pay grade.
Employees holding the same job may receive somewhat different pay, depending on where thuer pay falls within the range.
Motivating employees with incentives
Employees must feel the incentive plan is fair. Give employees say in allocating incentives. Employees also want interested work, appreciation for their efforts, flexibility, and a sense of belonging to the work group, and the inner satisfaction of work well done.
Equal employment opportunity
Employers must not base differences in pay on an employee's age, sex, race, ot other protected status. No guarantee of equal pay for mena na dwoman, white and minorities or any other group. Comparable worth policies.
Legal Requirements
Equal pay for equal work, minimum wage, overtime pay, restrictions to child labor.
Fair Labor Standards Act (FLSA)
Federal law that establishes a minimum wage and requirements for overtime pay and child labor.
Social security
Federal old age survivors, disability health insurance (OASDH) program (social security). combines: - Old age (retirement) insurance - Survivor's insurance - Disability insurance - Hospital insurance (medicare part a) - Supplementary medical health insurance (medicare part b).
Social security benefit
Flat payroll tax on employees and employers
Healthcare
For employers with at least 50 employers, payment of a fee to the federal government of the employer does not meet condition for providing health insurance benefits.
Incentive pay
Forms of pay linked to employee's performance as an individual, group member or organization member. Influential because the amount paid is linked to certain predefined behaviors or outcomes. May be in the form of a commission or bonus.
13-45 explain how organizations link pay to their overall performance
Given the limitations of profit sharing plans, one strategy is to use them as compotent of pay stream that includes to use them as a component of s psu system that includes other cute kinds of fay ex.
Organization's Goals
High- quality workforce, cost control, equity and fairness, legal compliance.
12-4 Describing how employees evaluate fairness of pay structure. Powerpoint
In developing a pay structure, it is important to keep in mind employees' options about fairness. After all, one of the purposes of pay is to motivate employees , and they will not be motivated by pay if they think it is unfair.
Profit sharing
Incentive pay in which payments are a percentage of the organization's profits and do not become a big part of the employee's base salary. Many encouraged employees to think like owner. Evidence is not clear whether profit sharing helps organization perform better.
Profit sharing
Incentive pay in which payments are a percentage of the organization's profits and do not become a part of the employer's base salary. May encourage employees to think like owners. Evidence is not clear whether profit sharing helps an organization learn better.
Factors to consider in mertit
Individual performance, position in the range, individual equity, righting wrongs.
HR professionals need to determine whether to gather data focusing on particular industries or on the job categories.
Industry specific data are especially relevant for jobs with skills that can be transferred to companies in over industries , survey of job classifications will be more relevant.
Short- term disability
Insurance that pays a percentage of disabled of disabled employees salary as well as benefits for 6 months are less .
Long- term disability insurance
Insurance that pays a percentage of disabled with some R5 frirnd.
Optional benefit programs
Insurance, retirement plans, paid leave
Decisions about Pay, components
Job Structure Pay Level Pay Structure
Key jobs
Jobs that have relatively stable content and re common among many organizations. Organizations define key job to help create pay structures. Pay cna be based on survey data.
Minimum wage
Lowest amount that employers may pay under federal or state law, states as an amount of pay per hour.
Exempt employees from overtime pay
Managers, outside sales people, and other employees not covered by FLSA requirement for overtime pay.
Much like piecework plans, standard hour plans encourage employees to work as fast as they can, but not necessarily to care about quality or service.
Merit pay systems gives lowest paid performers the biggest pay increases.
When in equity: Pay seems fair and this means
My outcomes. inputs are the same as your outcomes/ inputs. If inequity then the outcomes and inputs are different for the different parties.
Performance Bonuses
Not rolled into base pay. The employee must re- earn them during each performance period. May be a one- time reward. May be linked to objective performance measurements, rather than subjective ratings.
Bonuses for individual performance can be extremely effective and give the organization great flexibility in deciding what kinds of behavior to reward.
Organizations also may motivate employees with one- time bonuses. When one organization acquires another, it usually wants to retain certain valuable employees in the organization it is buying, so organizations involved in acquisitions may pay retention bonuses.
Labor Markets
Organizations must compete to obtain human resources in labor markets. Competing for labor establishes minimum an organization must pay to hire and employee for a particular job.
CEOs at private companies received median compensation of $362,900.
Organizations need to plan not only how much pay manager and executives, but also how to pay them.
Product Markets
Organizations product market includes organizations that offer competing goods and services. Organizations compete on quality service, and price. Cost of labor is significant part of an organization's cost.
Overtime pay
Overtime rate under FLSA is 1½ times employee's usual hourly rate, including any bonuses, and piece-rate payments. exempt employees and non exempt employees
Green- circle rate
Pay at a rate that falls below the pay range for the job.
Red- circle rate
Pay at rate that falls above the pay range for that job.
Pay structure
Pay policy resulting from job structure and pay- level decision.
Pay level: Deciding What to pay
Pay ranges depend on the competitive environment. Market rate vs. paying above market rate to acquire top talent. Pay policies are one of the most important human resource tools for encouraging desired employee behaviors and discouraging undesired behaviors.
pay level decision, job structure decision, pay structure decisions
Pay rates, pay grades, pay ranges, pay differentials
Unemployment insurance benefit
Payroll tax on employers that depends on state requirements for rating.
Incentives
Piecework rates, Standard hour rates, Merit pay, individual bonuses, sales commissions.
Market forces
Product markets and labor markets.
Worker's compensation insurance benefit
Provide coverage according to state requirements, premium depending on experience rating.
Job structure
Relative pay for different jobs within the organization.
Family and Medical leave act (FMLA) 1993
Required organizations with 50 or more employees to provide up to 12 weeks unpaid leave: - after childbirth/ adoption - To care for seriously ill family member, Employers must guarantee these employees some or comparable job when they return to work. Pregnancy discrimination act
Stock options
Rights to buy certain number of shares of stick at a specific price.
Pay grade
Sets of jobs having similar worth or content, grouped together to establish rates of pay. May not match market rate.
Team awards
Similar to group bonuses, but more likely to use a broad range of performance measures: cost savings, successful completion of a project, meeting deadlines.
While profit sharing plans are itended to encourage employees to think like owners, a stock of ownership plan actually makes employees part owners of the organzation.
Some companies are trying to pull me. foucs on sucess of organiztio as a ehole, push for eleigability.
Pay for the key jobs can be based on
Survey data , and pay for the organizations other jobs can be based on the organization's job structure. A job with a higher evaluation score athn a particular key job would receive a higher pay than the key job.
Group bonus
Tend to be for small work groups. Reward members of a group for attaining a specific goal, usually measured in terms of physical output.
Merit increases
The "annual raise", eternal variables determine the size of the pool. Your performance determines your allocation of the pool Is a base pay increase, not bonus. Pools generally cluster around 3%
Straight piecework plan
The employer pays the same rate per piece no matter how much the worker produces.
Differential piece rates
The piece rate depends on the amount procuded
Compa- ratio
The ratio of average pay to midpoint pay range. If average equal midpoint, CR is 1 If CR is greater than 1, average pay is above the midpoint. If Cr is less than 1, average pay is below the midpoint.
Among all male employees, black workers earned 76 cents for every dollar earned by white workers and hispanic workers just 67 for every dollar
a white made.
Pay differenetials
adjust to a pay rate to reflect the differences in working conditions or labor markets. Many businesses in the U.S. provide a pay differentials based on geographic location. The most common approach is to move an employee higher in the pay structure to compensate for higher living costs.
Co-pays
amount employees pay when they visit a doctor
Deductible
amount out of your pocket expenses employee pays before insurance kicks in
ESQP
an arrangement in which the organization distributes shares of stock to all its employees, by placing it in a trust. Most common form og employee ownership.
Short- term incentives
bonus based on the ROI, years profits , or other measurements related to the otgan ization's goals. Actual payemnt of bonus may be delayed.
Any form of incentive pay has advantages and disadvantages and because of this, many organizations deisgn a mix of pay programs. The aim is to balance the disadvantages of one type.
can lead to a balanced scorecard
about 9 out of 10 U.S. workers are covered by the state worker's
compensation laws.
Pay rates
determining salaries for non- key jobs. Pay policy line reflects the pay structure in the market
Among full- time workers in 2012, woman on average earned 73 cents for every
dollar earned by men.
To conduct a job evaluation, the organization's job evaluation committee identifies
each job's compensable factors.
Along with OASDHI, the Social Security Act of 1935 established a program of unemployment insurance. the federal government left it to
each state's discretion to establish unemployment insurance program. At the same time, the social security act create a tax incentive structure that quickly led to every state to establish the program.
Nonexempt employees
employees covered by FLSA requirements for overtime pay.
Organizations that want employees to focus on efficiency may adopt gainsharing, knowing they can
enjoy a financial benefit from helping the company be more productive, employees supposedly will look for ways to improve and work more efficiently.
Gainsharing
group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees. Addresses challenge of identifying appropriate performance measures for complex jobs. Frees employees to determine their own and their group's performance.
Lon- term incentives
include stopc options, stock purchase plans. Reationate this excutives will want to do what the best of life maddie .
Establishing a pay structure simplifies the process of making decisions about individual employees' pay by grouping together employees with similar jobs. done based on:
legal requirements, market forces and the organization's goals.
Insurance
life/ medical health insurance for dependents and domestic partners.
ESQP: (ESOP)- an arrangement in which i. didnt know
lol
Paid leave
most common: vacations, holidays and sick days. Options: Jury duty, funerals, funeral of family members, military duty, voting or giving blood.
Retention bonus
one-time incentives paid in exchange for remaining with the company- to top managers, engineers, top- performing salespeople, and information technology specialist.
The ways employees respond to their impressions about equity can have a great impact on the organization. To decide whether a level of pay s equitable, the person compares her ratio of
outcomes and inputs with other people's outcome/ input rations. Typically, if employees see their pay as equitable, their attitudes and behavior continue unchanged. If employees see themselves as receiving an advantage, they usually rethink the situation to see it as meerley equitable. If employees conclude that they are under -rewarded, they are likely to makeup the difference in one of three ways.
Commissions
pay calculated as a percentage of sales. Very tremendously from one industry to the other.
Workers who meet conditions for unemploymnet
receive benefits at the state level rate- typically about half of the person's previous earnings- for a period of 26 weeks. All states have a minimum and maximum weekly benefit levels.
Cost of worker's compensation is borne by the employer. The states differ in terms of how they fund worker's compensation insurance.
some state shave a single state fund. Most states allow employers to purchase coverage from private insurance companies. Most also self- funding by employers. Organizations can minimize the cost of this benefiting by keeping workplaces safe and making employees and their managements constant safety issues.
Certain benefits are required by law
tax laws can make benefits favorable to employees. Employers can get volume discounts for insurance, creative benefit packages make more companies more competitive.
Midpoint
the middle number.
Pay grades are bigger for higher level jobs because
these employees have a bigger impact on the company overall, they need a bigger grade to compensate.
Both group bonuses and team awards have the advantage that
they can encourage group or team members to cooperate so that they can achieve their goal. Depending on the reward system, competition among groups. The organization should carefully set the performance goals for these incentives so that concern for cost or sales does not obscure other objectives, such as quality customer service, and ethical behaviors.
Medical insurance also
uses consolidated omnibus budget recognition (COBRA) 1985. Federal law that requires to permit employees and meetings so we can have something.
A typical approach is to use the market rate ot the pay policy line as the midpoint of range for the job or pay grade. The minimum and maximum values for the range may also be based on market surveys of those amounts. Pay ranges are most common for
white- collar jobs and dor jobs that are not covered by the union contracts