MNGT 475 NICHOLLS MIDTERM ( DR. CASTILLE)

joint point accurul models

these encourage employees to develop skills and be able to perform jobs in different job families, which promote organizational flexibility and attaining company goals. Skills are given values, with highly valued skills enhancing core compensation.

Total benefits Insurance Wages and salaries Total compensation Legally required benefits Paid leave

which of the following categories are union workers out-earning nonunion workers?

Employee Retirement Income Security Act (ERISA)

Allows the federal government the power to regulate the implementation of certain benefits (e.g., medical, life, disability, pension), thereby protecting employee benefits rights. Prohibit employers from discriminating in favor of highly compensated employees in contributions or benefits, availability of benefits, rights, or plan features. In addition, employers may not amend pension plans so that highly compensated employees are favored.

unions

Are pay and benefits policies compliant with collective bargaining agreements?

US government

Are policies compliant with employment legislation?

Suppose you work in an organization that pursues a lowest-cost strategy (e.g., IKEA). Which of the following compensation-related decisions would support the execution of this generic business strategy?

Generally speaking, take actions that reduce output costs per employee. Focus more on pursuing quantity of output over quality of output Ensure that individuals jobs are designed to be relative simple and repetitive as opposed to complex and ambiguous, thereby allowing for desired behaviors to be easily repeated.

Pension Protection Act of 2006

Designed to strengthen protections of employees' company-sponsored retirement plans.

discretionary employee benefits

Disability insurance, life insurance, retirement plans, paid time off, and workplace accommodations

executives

Do our policies allow us to attract and retain the best-qualified talent within the parameters established by employment legislation?

How profitable it is to operate within a given industry The human capital requirements for operating within an industry The product market within which an organization operates The amount of large-scale equipment required for an organization to operate within an industry

Even when workers hold the same kind of job in different organizations, compensation may vary because the organizations operate within different industries. For instance, utility companies pay higher wages than retail companies. Which of the following factors helps explain why wages vary across industries?

income continuity, safety, and work hours

Fair Labor Standards Act (FLSA) clarifies minimum wages, what constitutes "overtime pay", and how children can acquire work experience Fair Pay rules define what constitutes payable forms of work Workers' compensation laws help individuals attain income when they have become unemployed through no fault of their own (e.g., workers' compensation)

general biased

First impressions, halo or horn effects, similar-to-me effects, illegal discriminatory biases (e.g., racial attitudes)

Working conditions Skill requirements Responsibility requirements

From an HR perspective, which of the following are compensable factors that inform pay rates?

the internal revenue code

States that employers with qualified retirement plans can have their tax liabilities reduced. In other words, employers receive a tax break on the amount paid out for employees' retirement.

stair step model

A job structure contains five levels of assembly line technicians (Assembly Tech 1 through Assembly Tech 5). A new employee, once they go through training, will become an Assembly Technician 1. For them to become a level 5 Assembly Tech, they must move sequentially through training (e.g., go through training to become an Assembly Tech 2, then go through training to become an Assembly Tech 3, etc.). This is required because the skills learned in training build on one another.

skill block model

A job structure contains five levels of clerks (Clerk 1 through Clerk 5). A new employee, once they go through training, will become a Clerk 1. For them to become a Clerk 5, they can simply take on the training to become a Clerk 5. This is allowed because the skills learned to not necessarily build on one another.

merit pay is for observed job​ performance, and​ knowledge-based pay is for potential future performance

A key difference between knowledge-based pay and merit pay is that ________.

Behavioral observation scale

A manager uses the following form in evaluating her​ employees: ​#3 The incumbent is expected to complete the task in a timely fashion. 1-Never 2-Almost Never 3-Sometimes 4-Fairly Often 5-Very Often What type of performance appraisal method is the manager​ using?

$832,000

Butcher Enterprises has experienced substantial employee turnover among its office workers. During exit interviews, more than 80% stated that low pay was the top reason for resigning. The company conducted a survey of local companies' pay practices to confirm whether this concern is valid. Indeed, Butcher's average hourly pay rate for total compensation falls well below the market. The compensation survey showed an average hourly rate of $23 for total compensation. Of this amount, wages are $16/hr. and benefits are $7/hr. In comparison, Butcher spends an average hourly rate of $19 for total compensation, 70% of which is for wages. For you to receive credit for answering this question correctly, you must either submit a link to a Google Sheet with the correct formulas in use or explain your math (both of which you can do in responding to the next question). Assuming that Butcher's 100 office workers put in 2080 hours worth of service each year, how much additional money does Butcher need to allocate toward compensation in order to match the market rates for their office workers?

32

By what percent are compensation costs in union settings higher than in nonunion settings for total compensation?

joint point accural model

Competencies (e.g., coding, leadership, negotiation, communication) that are required in a particular job structure are given different point values. For instance, coding skill are given a point value of 100, while negotiation skills are given a point value of 50. Individuals who undergo training are given points, which are then translated into enhanced compensation.

Adjustments to Core Compensation

Cost of living adjustments, seniority pay, merit pay, incentive pay, person-focused pay

Health Insurance Portability and Accountability Act (HIPAA)

Guarantees ready access to coverage under a subsequent employer's health plan upon securing employment, regardless of health or claims experience. It also protects the transfer, disclosure, and use of healthcare information.

True

HR strategies (e.g., compensation, training and development, staffing) and practices (e.g., using incentives) are internally consistent if they complement one another.

Core Compensation

Hourly wage or annual salary

employees

How can I increase my pay and advance within the organization?

line manager

How do I ensure that pay rates are appropriate for the various jobs I oversee?

High performance team settings where employees must be trained to share scheduling, budgeting, and quality control tasks Manufacturing settings where employees training on new techniques facilitate continuous improvement

In which work settings would using person-focused pay help an organization to achieve its goals?

base wages or salaries

Incentive or variable pay is defined as​ compensation, other than​ ________ that​ fluctuate(s) according to​ employees' attainment of some​ standard, such as a​ pre-established formula, individual or group​ goals, or company earnings.

group incentive plans

Incentive plans that promote collaborative behavior are called

comparison systems

Involves contrasting employees against one another and then terminating the bottom performers.

Which of the following are activities that describe how you can effectively be a strategic HR business partner?

Make sure that HR practices (such as compensation practices) facilitate strategy execution. Identify ways in which HR strategy can reinforce organizational behaviors that help a business to execute its strategy\ Tie compensation practices to training and development to prepare the workforce for foreseeable future business contexts Help other chief executive officers (e.g., CEO, CFO) see how an organization's human capital interacts with business capital to expand or shrink customer value.

errors of leniency

Most employees are evaluated as "above average" even though this cannot be true statistically/mathematically speaking

Errors of Strictness

Most employees are evaluated harshly (i.e., below average) even though some clearly are below average and, therefore, deserve more credit than they are receiving.

contrast errors

Occurs when supervisors judgments are affected by comparing one employee to another without having some frame of reference (e.g., job description) from which to base their appraisal

accommodating disabilities and family needs

Pregnancy Discrimination Act establishes pregnancy as a protected classification Americans with Disabilities Act establishes that reasonable accommodations must be made Family Medica Leave Act (FMLA) establishes that employees can take a defined period of unpaid leave for select personal reasons

errors of central tendency

Rating most employees as "average" even though some are clearly better than average (i.e., being unwilling to discriminate among employees).

unions

Relies on compensation professional to abide by collective bargaining agreements.

executives

Relies on compensation professionals to develop and manage compensation systems to ensure that a company's practices are (i) consistent with the law, (ii) allow the organization to attract/recruit and retain the talent the organization needs, and (iii) are cost-effective

U.S gov

Relies on compensation professionals to keep updated and comply with employment legislation as well as demonstrated that any employment practices discriminate based on merit or on business necessity grounds rather than on the basis of protected classes (e.g., race, sex, etc.).

employees

Rely on compensation professionals to (i) develop and implement training programs and (ii) link training and performance to pay, as well as (iii) clarify discretionary benefits (e.g., income protection, paid time off).

line mangers

Rely on compensation professionals to ensure that they (i) exercise sound compensation judgment in practice and do not violate employment law, (ii) clarify pay differentials (i.e., why one individual is paid differently from another), and (iii) train them in how to evaluate jobs and the work that individuals do within a job.

legally required employee benefits

Social security, workers' compensation, family and medical leave, health insurance

The labor market dynamics or supply and demand for talent within an occupation The knowledge, skill, ability and other characteristics that are required to perform within a given occupation

Some occupations pay more than others (e.g., dentists make more than teachers). Which of the following explains why some occupations are more profitable than others?

Group incentives such as either equal payments (e.g., bonuses) or differential payments based on to team member's contribution towards goals

Suppose you are a compensation manager designing the compensation system for a new organization set to launch in one year. In this organization, the work is primarily performed by various teams of professionals (e.g., research and development team, HR team, etc.). It is important that individuals within each of the specific teams collaborate or work together to solve organizational problems that the team is tasked with solving (e.g., the research and development team is tasked with creating new products and services while the HR team is tasked with recruiting and retaining high-quality talent). As compensation manager, you get to design the incentives that will encourage team members within each specific team to work together. Which of the following set of incentives would help you to achieve the objective of attracting, retaining, and rewarding employees who engage in the right behaviors?

Company-wide incentive plans such as profit-sharing plans (e.g., bonuses given out to all employees) or stock options that grow in value over time as the value of products or services increases in market value

Suppose you are a compensation manager designing the compensation system for a new organization set to launch in one year. The organization contains many functional areas (e.g., software, marketing, administration, web design, etc.) that are tasked with solving interrelated problems (e..g, the software team works closely with web design and marketing to attract and retain new customers). Therefore, the employees should work together in a cross-functional manner, share their goals and expertise, and do what it takes to help the company to succeed. As compensation manager, you get to design the incentives that will encourage employees to collaborate with employees from other areas of the organization to meet organizational objectives. Which of the following set of incentives would help you to achieve this objective?

behavioral systems

System where the emphasis is on accurately measuring whether or not desired (or undesired) actions occurred on the job.

goal-oriented systems

System where the emphasis is setting individual or team objectives that are aligned with broader organizational objectives. Supervisors and employees meet frequently to discuss how well objectives are being met and whether activities are aligned with organizational needs.

pay discrimination

The Equal Pay Act ensures that individuals are paid equally for equal work regardless of protected classification (e.g., sex, age, etc.). It also defines compensables factors as a basis for defining pay differentials. The Civil Rights Act complements the Equal Pay Act by mandating that all employment-related decisions de uninformed by protected classifications. Violations come in the form of disparate treatment (e.g., men are paid more than women, as they are often breadwinners) and adverse impact (e.g., using pay policies that covertly reward men more than women).

As a compensation professional in an organization, suppose you are told by your CEO that employees do not feel as though their work is appreciated by management. If that is the case, then which compensation system design element would you give more attention to and possibly alter?

The extent to which the compensation system's policies are recognize employee contributions

rucker plan

The intention of this program is to encourage employees to become more involved in collaboratively solving problems with other employees. Employees are encouraged to find ways to minimize wastes and reduce or control labor costs in ways that add value to the business. The larger the ratio of economic value-add to the cost of production, the larger the gainsharing payout.

scanlon plan

The intention of this program is to reward the reduction of labor costs in ways that improve the sales value of production. Managers of these programs often aim to encourage individuals to work together (e.g., teamwork). The smaller the ratio of labor costs to sales value, the larger the gainsharing payout.

Amount of merit pay increase

The motivational benefit of merit pay can be perceived differently by employees and employers. Of the following factors of merit​ pay, which one is perceived differently by employers and​ employees?

Intrinsic Compensation

The personal satisfaction someone receives from the work that they are doing for a company

Employers responded to industrialization in the 19th and 20th century and the Great Depression by sponsoring health insurance. Additionally, the National Labor Relations Act of 1935 allowed employees to bargain for benefits.

Which of the following explains the origins of discretionary benefits?

Paid time off

Which of the following is NOT a form of legally required benefit?

managed care plans

These plans emphasize cost controls by limiting an employee's choice of doctors and hospitals. They require employees to work through either an (i) health management organization (HMO), which give employees access to a primary care physician, a (ii) preferred provider organization (PPO), which gives employees access to a network of physicians, or a (iii) point of service, which blends an HMO with a fee-for-service arrangement.

consumer driven plans

These plans have the objective of helping companies maintain control over costs while also enabling employees to make smarter choices about health care (blends the other two kinds of plans). Involves giving employees accounts from which to withdraw funds for health-related needs (i.e., flexible spending accounts (FSA), health reimbursement accounts (HRA), and/or health savings accounts (HSA)).

free-for-service plan

These plans provide protection against health care expenses in the form of a cash benefit paid to the insured or directly to the health care provider after the employee has received health care services. These plans cover (i) hospital expenses, (ii) surgical expenses, and (iii) physician charges, which are paid for either by an insurance company or via the organization's cash reserves.

cross deparmental model

Training is designed to build competencies that are required across different functional areas of the organization (e.g., administration, human resources). Modules might include managing sporadic, short-term fluctuations caused by seasonal shopping. A trained worker would be able to easily work across different functional areas or departments.

Employee stock options profit sharing plans

We covered several kinds of incentives in class. Select those that would most likely cause employees to collaborate across organizational functions or, stated differently, take actions that would positively affect the company as a whole. More specifically, of those incentives below, select only company-wide incentives.

Group

When cooperation within a team of individuals is needed for work to be achieved (e.g., new skills to be learned) and when all group members have some impact on achieving a common goal even though individual contributions may not be equal, these types of incentive plans should be used.

Whether incentive pay should replace or complement traditional pay. The criteria by which performance should be judged. Whether the plan should be based on group or individual employee performance The level of risk employees will be willing to accept in their overall compensation package. The time horizon for goals--long term, short term, or a combination of both.

When designing an incentive pay plan, HR professionals and line managers should consider which of the following key factors (select all that apply):

Social Security

Which of the following is NOT an example of discretionary benefits?

Keep in mind that the larger portion of incentive pay that comprises total compensation, the greater risk you take on in terms of acquiring the talent that you need.\ . Base payouts on individual or group performance plans, but not both Consider how frequently goals should be assessed and incentives paid out accordingly Make sure that incentivized behaviors help you to executive the organization's strategy . Consider how incentive pay could complement or even replace traditional forms of base pay (e.g., merit)

When designing incentive plans, which of the following considerations should be made?

indvidual

When employees' performance can be measured objectively (e.g., number of units produced, sales amount, reduced errors), when employees have sufficient control over work outcomes, and when incentives do not create a level of unhealthy competition among workers that harms productivity, these incentive plans should be used.

company wide

When it is believed that employees' collective sharing in company profits will align their actions with the strategic decisions of the organization, this incentive program should be used.

round all decisions regarding pay differentials in the job analysis Train managers to differentiate performers in meaningful ways (e.g., avoid biases and rater errors).\ . Make sure that managers and employees are trained/oriented to the performance appraisal process so that all understand how it should work. Make sure that performance appraisals link clearly to business goals and objectives

Which of the following activities should be taken by compensation professionals seeking to enhance the link between pay and performance via merit-based pay?

Increased training costs . May require an overhaul of the compensation system Increased labor costs Increased overhead costs

Which of the following are disadvantages of using person-focused pay plans?

Job descriptions clearly differentiate one job from other similar jobs in terms of job content Jobs are evaluated in terms of relative worth to the organization

Which of the following are necessary for ensure that job structures are internally consistent?

person-focused pay connects pay to job-related abilities person-focused pay helps organizations compete globally by attracting and retaining employees who are willing to invest in themselves person-focused pay rewards employees with high growth-needs (i.e., those who are willing to invest in themselves) . person-focused pay makes pay more contingent on potential rather than entitlements (e.g., longevity, seniority, or tenure) person-focused pay helps organizations to consolidate jobs and build a workforce that can adapt to technological innovations . person-focused pay enriches work, allowing employees to enhance their pay by taking on more training

Which of the following are reasons why organizations might adopt person-focused pay programs?

They can confer tax advantages to companies that offer certain kinds of benefits (e.g., qualified retirement plans). The can contribute to a company's competitive advantage if they fit a company's strategic situation. Unless properly managed, they can become entitlements. They can promote behaviors that hold strategic value for an organization They can help a company to distinguish itself from its competitors by attracting high quality talent.

Which of the following are true regarding discretionary benefits?

These systems clearly define job duties and responsibilities in an efficient manner (i.e., jobs lack redundancy) May harm competitiveness by encouraging employees to work on only those tasks that are specified in their job description Job structures are often rigid and limit organizational flexibility These systems can facilitate lowest-cost strategies

Which of the following are true regarding internally consistent compensation systems?

Jobs are inherently enriched Skills are given a market valuation Employees are awarded based on gaining knowledge or skills

Which of the following attributes distinguish person-focused pay from job-based pay structures?

Multiple job analysts analyze 15 jobs. The methods involve administering a structured survey termed the Position Analysis Questionnaire to a sample of job incumbents as well as conducting a semi-structured job analysis interview with supervisors.

Which of the following best describes a job analysis process that would most likely produce consistent job content information (i.e., yield reliable data) that faithfully describes the full job content domain for multiple jobs (i.e., yields valid data)?

A specialist An executive

Which of the following can a compensation professional be?

increased productivity enhance workers' skills are perceived by workers to produce desirable outcomes enhance performance quality

Which of the following consequences might be expected from implementing person-focused pay plans, particularly in manufacturing industries?

Cause employers to assume the costs of occupational injuries and accidents. Provide income continuity to workers who have lost employment through no fault of their own. Cause employers to provide health insurance to their employees.

Which of the following describe key aims of legally required benefits?

Incentive pay is based on objective goals whereas merit pay is based on subjective assessment of an employee's performance Employees know in advance how incentive pay amounts work (i.e., if I sell x products, I keep x% as commission); however, in merit-based plans, employees may not know how much extra compensation can be secured through increased merit.

Which of the following describe key differences between incentive pay and merit-based methods of pay?

How will the benefit program be paid for or financed How will the costs or risks associated with providing benefits be managed or controlled How will benefits offerings be communicated to employees so that affected groups use their benefits in ways that help the company Who will be covered by the benefit program How much discretion employees have in selecting or opting into benefits coverage

Which of the following design considerations should you make when designing a benefits program [select all that apply]?

Labor unions help employees secure higher wages and benefits

Which of the following effects do labor unions typically have on an organization?

prevailing wag laws

the Davis-Bacon Act assists nonunion organizations with attaining government contracts The Walsh-Healey Act helps independent contractors and related workers attain fair wages

Point method/Point evaluation method

Which of the following job evaluation techniques involves the following: 1. Comparing jobs on the basis of compensable factors (e.g., skill, responsibility, etc.) 2. Using quantitative methods for defining comparable worth 3. Defining the relative worth of all jobs within a job structure

As companies face foreign threats in the form of new entrants into their markets, companies must change the way in which human capital is managed to remain competitive.\ Technology makes older jobs obsolete. As jobs become consolidated, more highly-skilled workers are needed.

Which of the following reasons are commonly used to advocate for person-focused pay in order to attain a competitive advantage?

Team-based pay plans should compensate employees for achieving group objectives as well as assuming their respective roles in a team.

Which of the following statements is​ true?

Longevity pay Seniority Pay

Which of the following traditional forms of pay essentially allow employees' base pay to be raised periodically simply for the length of service?

person-focused pay​ system, employees tend to have more job variety and job enrichment than in a​ job-based system. . A​ person-focused pay system is harder to administer than a​ job-based pay system. In a person-focused pay system, pay is awarded based on what employees know or what they can do whereas for a job-based pay system, pay is awarded based on the attainment of job specific goals and objectives

Which statements comparing job-based pay to person-focused pay are true?

The employer adjusts the​ worker's base pay to account for inflation and then awards the worker an additional​ 2.5% increase based on a positive subjective evaluation.

Which would be an example of an employee receiving merit pay in an appropriate and typical​ manner?

Improshare plan

With this program, productivity is measured more tangibly (e.g., products created per hour) and bonuses are paid out accordingly (e.g., the more products a group produces per hour, the larger the collective payout).

trait systems

Workers are evaluated with whether they express certain tendencies (e.g., judgment, leadership, dependability).

Cost of living The extent to which unions operate within a particular region The extent to which for-profit vs not-for-profit organizations employ individuals within a give region The extent to which certain occupations are concentrated in an area Industry wage differentials may be particularly salient because a particular industry is concentrated in a specific region

Working in certain regions of a country can influence wages (e.g., New York City vs. Ruston). What are some reasons why wages vary by geography/location?

Which of the following is a true statement about strategic compensation?

a. Strategic compensation is only one facet of HR strategy; others include HR strategies such as how to recruit and select the talent the organization requires. b. Strategic compensation aims to enhance the execution of a broader competitive organizational strategy (e.g., lowest cost, differentiation, or niche). c. Strategic compensation considers the intrinsic rewards associated with work. d. Strategic compensation works best when compensation practices are aligned both with organizational strategy and other HR tactical decisions (e.g., recruitment, selection, etc.). e. Strategic compensation considers the extrinsic rewards employees receive (e.g., core, benefits). ALL OF THE ABOVE

Behavior encouragement plans

awarded to employees who achieve certain behavioral milestones (e.g., going one month without a safety violation

management incentive plans

awards bonuses to managers when the division they manage exceed objectives (e.g., sales, profits, production)

referral plans

employees receive a bonus for recruiting highly qualified candidates who go on to become employees

spot bonus

employees who do something outstanding are given a monetary gift as a reward for outstanding work

stair step model

jobs are arranged in terms of complexity and individuals must be trained at each level of the hierarchy in order to move up; aimed at developing skill depth

skill block model

jobs are arranged in terms of complexity and individuals; however, individuals can simply undergo training only for a role at a higher level in the job hierarchy in order to work in said role; develops skills both horizontally and vertically

cross-departmental models

promote staffing flexibility by training employees in one department with critical skills that they would need to perform effectively in another department.

piecework plan

rewards workers for producing items over a designated production period (e.g., # of items per week)