MGT 412: Exam 1

Boureslan v. Aramco

a Supreme Court case in which the Supreme Court ruled that federal job discrimination laws do not apply to US citizens working for US companies in foreign countries.

Lorance v. AT&T Technologies

a Supreme Court case, limited employees' rights to challenge the use of seniority systems to only 180 days from the system's implementation date.

Atonio v. Wards Cove Packing Co.

a Supreme Court case, ruled that plaintiffs (i.e. employees) in employment discrimination suits must indicate which employment practice created disparate impact and demonstrate how the employment practice created disparate impact.

Brito v. Zia Company

a Supreme Court ruling, deemed that the Zia company violated Title VII of the Civil Rights Act of 1964 when a disproportionate number of protected-class individuals were laid off on the basis of low performance-appraisal scores. Zia Company's action was a violation of Title VII because the use of the performance-appraisal system in determining layoffs was indeed an employment test. In addition, the court rules that the Zia Company had not demonstrated that its performance appraisal instrument was valid.

Integrity Staffing Solutions, Inc. v. Busk et al.

a US Supreme Court ruling in which security screenings were not deemed to be a compensable activity when this activity is not an integral part of an employee's job description.

EEOC v. Madison Community Unit School District No. 12

a circuit court ruling, sheds light on judging whether jobs are equal based on four compensable factors: skill, effort, responsibility, and working conditions.

Ledbetter v. Goodyear Tire & Rubber Co.

a court case in which a female employee named Ledbetter sued Goodyear Tire & Rubber Co. after she learned that some male employees with the same job had been paid substantially more than her over a period of several years. She claimed that the statute of limitation period began when each discriminatory pay decision was made and communicated to her. She argued that multiple pay decisions were made over the years each time Goodyear endorsed each paycheck, making each a separate act of illegal pay discrimination.

Aaron vs. City of Wichita, Kansas

a court ruling, offered several criteria to determine whether the City of Wichita fire chiefs are exempt employees, including the relative importance of management as opposed to other duties, frequency with which they exercise discretionary powers, relative freedom from supervision, and the relationship between their salaries and wages paid to other employees for similar nonexempt work.

management by objectives (MBO)

a goal oriented performance-appraisal method, requires that supervisors and employees determine objectives for employees to meet during the rating period, and then employees appraise how well they have achieved their objectives.

occupation

a group of jobs, found at more than one company, in which a common set of tasks are performed or are related in terms of similar objectives, methodologies, materials, products, worker actions, or worker characteristics.

skill blocks model

a kind of pay-for-knowledge program, applies to jobs from within the same job family. Employees progress to increasingly complex jobs; however, skills do not necessarily build on each other in a skill blocks program.

cross-departmental models

a kind of pay-for-knowledge program, promote staffing flexibility by training employees in one department with some of the critical skills they would need to perform effectively in other departments.

Paycheck Fairness Act

a second key initiative in closing the pay gap between men and women. Strengthens the Equal Pay Act of 1963 by strengthening the remedies available to put sex-based pay discrimination on par with race-based pay discrimination.

team-based incentives

a small group of employees perform work from home or some other location besides the office

behaviorally anchored rating scales (BARS)

a specific kind of behavioral system, are based on the critical incident technique (CIT), and these scales are developed in the same fashion with one exception. For the CIT, a critical incident would be written as "the incumbent completed the task in a timely fashion."

critical incident technique (CIT)

a specific kind of behavioral system, requires job incumbents and their supervisors to identify performance incidents- on-the-job behaviors and behavioral outcomes - that distinguish successful performance from unsuccessful performance. Supervisor then observes the employees and records their performance on these critical job aspects.

scanlon plan

a specific type of gain sharing program that emphasizes employee involvement. Gain sharing awards are based on the ratio between labor costs and sales value of production.

job-point accrual model

a type of of pay-for-knowledge program, provides employees opportunities to develop skills and learn to perform jobs from different hob families.

stair-step model

a type of pay-for-knowledge program, resembles a flight of stairs. The steps represent jobs from a particular job family that differ in terms of complexity. Skills at higher levels build upon previous lower-level skills.

behavioral systems

a type of performance appraisal method, requires that raters judge the extent to which employees display successful job performance behaviors.

trait systems

a type of performance-appraisal method requires raters to evaluate each employee's trait or characteristics

comparison systems

a type of performance-appraisal method, require that raters evaluate a given employee's performance against other employees' performance attainments. Employees are ranked from the best performer to the poorest performer.

paired comparisons

a variation of simple ranking job evaluation plans, orders all jobs from lowest to highest based on comparing the worth of each job in all possible job pairs. Paired comparison also refers to a specific kind of comparison method for appraising job performance. Supervisors compare each employee to every other employee, identifying the better performer in each pair.

collective bargaining agreement

a written document that describes the terms of employment approved by management and employees during negotiations. It codifies the terms and conditions of employment regarding rates of pay and pay adjustments, hours of work, or other working conditions of employees.

Fair Labor Standards Act of 1938 (FLSA)

addresses major abuses that intensified during the Great Depression and the transition from agricultural to industrial enterprises. (substandard pay, excessive work hours, employment of children workers)

Bennett Amendment

allows employees to charge employers with Title VII violations regarding pay only when the employer has violated the Equal Pay Act of 1963.

piecework plans

an individual incentive pay program, rewards employees based on their individual hourly production against an objective output standard, determined by the pace at which manufacturing equipment operates.

discretionary benefits

are benefits that employers offer at their own choice. These benefits fall into three broad categories: protection programs, paid time off, and services.

line employees

are directly involved in producing companies' goods or service delivery. Assembler, production worker, and sales employee are examples of line jobs.

protection programs

are either legally required or discretionary employee benefits that provide family benefits, promote health, and guard against income loss caused by such catastrophic factors as unemployment, disability, or serious illness.

referral plans

are individual incentive pay plans that reward employees for referring new customers or recruiting successful job applicants.

behavioral encouragement plans

are individual incentive pay plans that reward employees for specific such behavioral accomplishments as good attendance or safety records

compensable factors

are job attributes (e.g. skill, effort, responsibility, and working conditions) that compensation professionals use to determine the value of jobs.

legally required benefits

are protection programs that attempt to promote worker safety and health, maintain family income streams, and assist families in crises. (Social Security Act, FMLA, ACA)

spot bonuses

are relatively small monetary gifts provided to employees for outstanding work or effort during a reasonably short period of time.

vertical skills

are those skills traditionally considered supervisory skills (scheduling, coordinating, training, and leading others).

management incentive plans

award bonuses to managers who meet or exceed objectives based on sales, profit, production, or other measures for their division, department, or unit.

General Schedule (GS)

classifies federal government jobs into 15 classifications based on factors as skill, education, and experience levels. In addition, jobs that require high levels of specialized education significantly influence public policy or require executive decision making are classified in three additional categories: Senior Level (SL), Scientific & Professional (SP), and Senior Executive Service (SES).

internally consistent compensation systems

clearly define the relative value of each job among all jobs within a company. This ordered set of jobs represent the job structure or hierarchy. Companies rely on simple, yet fundamental, principle for building internally consistent compensation systems: Jobs that require greater qualifications, more responsibilities and more complex duties should be paid more highly than jobs that require less qualifications, fewer responsibilities, and less complex job duties.

job-based pay

compensates employees for jobs they currently perform.

early retirement programs

contain incentives designed to encourage highly paid employees with substantial seniority to retire earlier than they planned. These incentives expedite senior employees' retirement eligibility and increase retirement income.

Portal-to-Portal Act of 1947

defines the term hours worked that appears in the FLSA.

stock options

describe an employee's right to purchase company stock.

competitive advantage

describes a company's success when the company acquires or develops capabilities that facilitate outperforming the competition.

gain sharing

describes group incentive systems that provide participating employees an incentive payment based on improved company performance, whether for increased productivity, increased customer satisfaction, lower costs, or better safety records

core compensation

describes the monetary rewards employees receive. There are seven types of core compensation: two forms of base pay hourly pay (or wage) and salary, seniority pay, merit pay, incentive pay, cost-of-living adjustments (COLA), and pay-for-knowledge and skill-based pay.

Lilly Ledbetter Fair Pay Act

enables a female employee to file a charge of illegal pay discrimination within 180 days following receipt of a paycheck in which she feels that she may be discriminated against.

state governments

enact and enforce laws that pertain exclusively to their respective regions (IL or MI)

Occupational Safety and Health Act of 1970

ensures safe and healthful working conditions for working men and women by authorizing enforcement of the standards under the act.

Davis-Bacon Act of 1931

established employment standards for construction contractors holding federal government contracts valued at more than 2,000. Such contractors must pay laborers and mechanics at least the prevailing wage in their local area.

Social Security Act of 1935 (Title IX)

established three main types of legally required benefits; unemployment insurance, retirement income, and benefits for dependents, and medical insurance (medicare).

National Labor Relations Act of 1935 (NLRA)

establishes employees' rights to bargain collectively with employers on such issues as wages, work hours, and working conditions.

differentiation strategies

focus on product or service development that is unique from those of its competitors. Can take many forms including design or brand image, technology, features, customer service, and price.

cost leadership

focuses on gaining competitive advantage by being the lowest cost producer of a product or service within the marketplace, while selling the product or service at a price advantage relative to the industry average. Lowest-cost strategies require aggressive construction of efficient-scale facilities and vigorous pursuit of cost minimization in areas such as operations, marketing, and HR.

concessionary bargaining

focuses on unions promoting job security over large wage increases in negotiations with management.

federal constitution

forms the basis for employment laws

pay grades

group jobs for pay policy application. Human resource professionals typically group jobs into pay groups based on similar compensable factors and values.

bias errors

happen in the performance evaluation process when the rater evaluates the employee based on the rater's negative or positive opinion of the employee rather than on the employee's actual performance.

rating errors

in performance appraisals reflect differences between human judgement processes versus objective, accurate assessments uncolored by bias, prejudice, or other subjective extraneous influences.

employee benefits

include any variety of programs that provide paid time off (e.g. vacation), employee services (e.g. transportation services), and protection programs (e.g. life insurance).

extrinsic compensation

includes both monetary and non-monetary rewards.

360-degree performance appraisal methods

incorporate several sources of pertinent information to give a more complete and less biased assessment of job performance. Examples: supervisor, coworkers, and clients.

Title VII of the Civil Rights Act of 1964

indicates that it shall be an unlawful employment practice for an employer to discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment because of such individual's race, color, religion, sex, or national origin.

compensation surveys

involve the collection and subsequent analysis of competitor's compensation data.

Civil Rights Act of 1964

is a major piece of federal legislation designed to protect the rights of underrepresented minorities.

rucker plan

is a particular type of gain sharing program that emphasizes employee involvement. Gain sharing awards are based on the ratio between value added and the total cost of employment.

forced distribution

is a specific kind of comparison performance appraisal system in which raters assign employees to groups that represent the entire range of performance.

improshare

is a specific kind of gain sharing program that rewards employees based on labor hour ratio formula. A standard is determined by analyzing historical accounting data to find the number of labor hours needed to complete a product. Productivity is then measured as a ratio of standard labor hours and actual labor hours.

job analysis

is a systematic process for gathering, documenting, and analyzing information in order to describe jobs.

Pregnancy Discrimination Act of 1978 (PDA)

is an amendment to Title VII of the Civil Rights Act of 1964. The PDA prohibits disparate impact discrimination against pregnant women for all employment practices.

incentive pay

is defined as compensation, other than base wages or salaries, that fluctuates according to employees' attainment of some standard (pre-established formula, individual or group goals, or company earnings).

value-added formula

is the difference between the value of the sales price of a product and the value of materials purchased to make the product. This is part of the equation to determine payout amounts in Rucker gain sharing plans.

sales value of production

is the sum of sales revenue plus the value of goods in inventory. This is part of the equation to determine payout amounts in Scanlon gain sharing plans.

Walsh-Healey Public Contracts Act of 1936

mandates that contractors with federal contracts meet guidelines regarding wages and hours, child labor, convict labor, and hazardous working conditions. Contractors must observe the minimum wage and overtime provisions of the FLSA. This act prohibits contractors from exposing workers to any conditions that violate the Occupational Safety and Health Act.

specialist

may be an HR executive, manager, or nonmanager who is typically concerned with only one of the areas of compensation practice.

generalist

may be an executive, perform tasks in a variety of HR-related areas.

contrast errors

occur when a rater compares an employee to other employees rather than to specific explicit performance standards.

leniency error

occur when raters appraise an employee's performance more highly than it really rates, compared with objective criteria.

errors of central tendency

occur when raters judge all employees as average or close to average.

strictness errors

occur when raters judge employee performance to be less than what is is when compared against objective criteria.

negative halo effect

occurs when a rater generalizes an employee's negative behavior on one aspect of the job to all aspects of the job.

positive halo effect

occurs when a rater generalizes employees' positive behaviors on one aspect of the job to all aspects of the job.

first-impression effect

occurs when a rater makes an initial favorable or unfavorable judgement about an employee and then ignores or distorts the employee's actual performance based on this impression.

illegal discriminatory bias

occurs when a supervisor rates members of his or her race, gender, nationality, or religion more favorably than members of other classes.

free-rider effect

occurs when employees of lower ability, skill, and effort benefit equally as employees of higher ability, skill, and effort in group incentive plans. The free-rider effect can lead to resentment and turnover of stronger contributors because worker contributors are getting a "free ride".

federal governments

oversees the entire United States and its territories. The vast majority of laws that influence compensation were established at the federal level.

profit sharing plans

pay a portion of company profits to employees, separate from base pay, cost-of-living adjustments, or permanent merit pay increases.

current profit sharing

plans award cash to employees, typically on a quarterly or annual basis

deferred profit sharing

plans place cash awards in trust accounts for employees. These trusts are set aside on employee's behalf as a source of retirement income.

right-to-work laws

prohibit management and unions from entering into agreements requiring union membership as a condition of employment.

Americans with Disabilities Act of 1990 (ADA)

prohibits discrimination against individuals with mental or physical disabilities within and outside employment settings, including public services and transportation, public accommodations, and employment.

Age Discrimination in Employment Act of 1967

protects older workers age 40 and over from illegal discrimination

pension programs

provide income to individuals throughout their retirement

horizontal skills

refer to similar skills

local governments

refer to the municipal or county-level organizations that provide public services and ensure that the rights of citizens and employees are upheld in accordance with pertinent laws and regulations.

job control unionism

refers to a union's success in negotiating formal contracts with employees and establishing quasi-judicial grievance procedures to adjudicate disputes between union members and employers.

incentive effect

refers to a workers willingness to work diligently to produce more quality output than simply attending work without putting in the effort.

nonexempt

refers to an employee's status regarding the overtime pay provision of the FLSA. Employees whose jobs do not fall into particular categories are generally covered by overtime and minimum wage provisions.

exempt

refers to an employee's status regarding the overtime pay provision of the Fair Labor Standards Act of 1938 (FLSA). Administrative, professional, and executive employees are generally exempt from the FLSA overtime and minimum wage provisions.

competency

refers to an individual's capability to orchestrate and apply combinations of knowledge and skills consistently over time to perform work successfully in the required work situations.

spillover effect

refers to nonunion companies' offer of similar compensation as offered by union companies to their employees. The goal is to reduce the likelihood that nonunion workforces will seek union representation.

human capital

refers to sets of collective knowledge, skills, and abilities (KSAs) that employees can apply to create value for their employers. Companies purchase the use of human capital by paying employees an hourly wage or salary and providing benefits such as paid vacation and health insurance.

horizontal knowledge

refers to similar knowledge

strategic compensation

refers to the design and implementation of compensation systems to reinforce the objectives of both HR strategies and competitive business strategies. Compensation and benefits executives work with the lead HR executive and the company's chief financial officer to prepare total compensation strategies.

capital

refers to the factors that enable companies to generate income, higher company stock prices, economic value strong positive brand identity, and reputation. There is a variety of capital that companies use to create value, including financial capital (cash) and capital equipment (state-of-the-art robotics used in manufacturing). Employees represent a specific type of capital called human capital.

baby boom generation

refers to the generation of people born between 1946 and 1964.

vertical knowledge

refers to the knowledge traditionally associated with supervisory activities (performance appraisal or grievance reviews)

depth of skills

refers to the level of specialization, based on job related knowledge, an employee brings to a particular job.

depth of knowledge

refers to the level of specialization, based on job-related knowledge, an employee brings to a particular job.

just-meaningful pay increase

refers to the minimum pay increase that employees will see as making a substantial change in compensation.

Great Depression

refers to the period during the 1930s when many businesses failed and many workers became chronically unemployed.

competitive business strategy

refers to the planned use of company resources-financial capital, equipment capital, and human capital-to promote and sustain competitive advantage. The time horizon for strategic decisions may span multiple years.

similar-to-me effect

refers to the tendency on the part of raters to judge employees favorably who they perceive as similar to themselves

intrinsic compensation

reflects employees' psychological mind-sets that result from performing their jobs, for example, experiencing a great feeling from the belief that one's work matters in the lives of others.

merit pay programs

reinforce excellent performance by awarding pay raises commensurate with performance attainments.

market-competitive pay systems

represent companies' compensation policies that fit the imperatives of competitive advantage. Built on the basis of results from compensation surveys.

services

represent discretionary employee benefits that provide enhancements to employees and their families (tuition reimbursement or day care assistance).

employee stock option plans

represent one type of companywide incentives. Companies grant employees the right to purchase shares of company stock.

pay structures

represent pay rate differences for jobs of unequal worth and the framework for recognizing differences in employee contributions.

cost-of-living adjustment

represent periodic base pay increases that are based on changes in prices, as indexed by the consumer price index. Enable workers to maintain their purchasing power and standard of living by adjusting base pay for inflation.

company stock shares

represent the equity segments of equal value. Equity interests increases with the number of stock shares held.

interindustry wage differentials

represent the pattern of pay and benefits associated with characteristics of industries. Attributed to factors including the industry's product market, degree of capital intensity, profitability of the industry, and unionization of the workforce.

paid time off

represents discretionary employee benefits (vacation) that provide employees time off with pay.

disparate treatment

represents intentional employment discrimination, occurring whenever employers intentionally treat some workers less favorably than others because of their race, color, sex, national origin, or religion.

base pay

represents the monetary compensation employees earn on a regular basis for performing their jobs. Hourly pay and salary are the main forms.

company stock

represents the total equity or worth of the company.

disparate impact

represents unintentional employment discrimination. It occurs whenever an employer applies an employment practice to all employees, but the practice leads to unequal treatment of protected employee groups.

Family and Medical Leave Act of 1993 (FMLA)

requires employers to provide employees 12 weeks of unpaid leave per year in cases of family or medical emergency.

Title I of the Americans with Disabilities Act of 1990

requires that employers provide reasonable accommodation for disabled employees. Reasonable accommodation may include such efforts as making existing facilities readily accessible, job restructuring, and modifying work schedules.

Equal Pay Act of 1963

requires that men and women should receive equal pay for performing equal work.

group incentive programs

reward employees for their collective performance, rather than for each employee's individual performance.

merit pay programs

reward employees with permanent increases to base pay according to differences in job performance.

pay-for-knowledge

reward managerial, service, or professional workers for successfully learning specific curricula.

person-focused pay plans

rewards employees for specifically learning new curricula

person-focused pay

rewards employees for specifically learning new curricula.

Civil Rights Act of 1991

shifted the burden of proof of disparate impact from employees to employers, overturning several 1989 Supreme Court rulings.

Fair Pay Rules

specify the criteria for distinguishing between work that is not exempt from the overtime pay provision of the FLSA.

human resources strategies

specify the use of multiple HR practices to reinforce competitive business strategy. These statements are consistent with a company's competitive strategy.

human capital theory

states that employees' knowledge and skills generate productive capital knows as human capital. Employees can develop knowledge and skills from formal education or on-the-job experiences.

human capital theory

states that employees' knowledge and skills generate productive capital. Employees can develop knowledge and skills from formal education or on-the-job experiences.

staff employees

support the functions performed by the line employees. Ex: HR and accounting

job evaluation

systematically recognizes differences in the relative worth among a set of jobs and establishes pay differentials accordingly.

seniority pay

systems reward employees with permanent additions to base pay periodically, according to employees' length of service performing their jobs.

Older Workers Benefit Protection Act (OWBPA)

the 1990 amendment to the ADEA, indicates that employers can require older employees to pay more than younger employees for health care insurance coverage. This practice is permissible when older workers collectively do not make proportionately larger contributions than the younger workers.

labor hour ratio formula

used in determining the payouts in improshare plans, refers to a standard determined by analyzing historical accounting data to find the number of labor hours needed to complete a product. Productivity is then measured as a ratio of standard labor hours and actual labor hours.

skill-based pay

used mostly for employees who do physical work, increases these workers' pay as they master new skills

severance pay

usually includes several months of pay following involuntary termination and, in some cases, continued coverage under the employer's medical insurance plan. Employees often rely on this to meet financial obligations while searching for employment.

salary

Earn pay regardless of actual numbers of hours worked.

hourly pay or wage

Pay for each hour worked