HR Test 4

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merit pay

a system of linking pay increases to ratings on performance appraisals

standard hour plan

an incentive plan that pays workers extra for work done in less than a preset "standard time"

employee benefits

compensation in forms other than cash

mediation

conflict resolution procedure in which a mediator hears the views of both sides and facilitates the negotiation process but has no formal authority to dictate a resolution

flexible spending account

employee-controlled pretax earnings set aside to pay for certain eligible expenses, such as health care expenses, during the same year

nonexempt employees

employees covered by the FLSA requirements for overtime pay

vesting rights

guarantee that when employees become participants in a pension plan and work a specified number of years, they will receive a pension at retirement age, regardless of whether they remained with the employer

Job evaluation and Job evaluation methods

job evaluation - an administrative procedure for measuring the relative internal worth of the organization's jobs. Done by assembling a committee, consisting of people familiar with job. Compensable factors - factors company willing to pay for point manuals - published by trade groups and consultants key jobs - jobs that have relatively stable content and are common among many organizations, so it is possible to obtain survey data about what people earn in these jobs

industrial union

labor union whose members are linked by their work in a particular industry

skill-based pay systems

pay structures that set pay according to the employees' levels of skill or knowledge and what they are capable of doing

pay level

the average amount (including wages, salaries, and bonuses) the organization pays for a particular job

pay structure

the pay policy resulting from job structure and pay-level decisions

principle of effective incentive pay plans

- performance measures are linked to the organizations goals - employees believe they can meet performance standards -the organization gives employees the resources they need to meet their goals -employee value the rewards given -employees believe the reward system is fair -the pay plan takes into account that employees may ignore any goals that are not rewarded a complete plan for motivating and compensating employees has many components, from pay to work design to developing managers so they can exercise positive leadership

selecting employee benefits

1. organizations objectives (check table on page 421) 2. organizations budget 3. the expectations of the organization's current employees and those it wishes to recruit in the future cafeteria style plan - a benefits plan that offers employees a set of alternatives from which they can choose types and amounts of benefits they want.

health maintenance organization (HMO)

A health care plan that requires patients to receive their medical care from the HMO's health care professionals, who are often paid a flat salary, and provides all services on a prepaid basis

retirement plan types - contributory and non-contributory

Contributory plan - reitrement plan funded by contributions from the employer and employee noncontributory plan - retirement plan funded entirely by contributions from the employer defined benefit plan - pension plan that guarantees a specified level of retirement income employee retirement income security act - federal law that increased the responsibility of pension plan trustees to protect retirees, established certain rights related to vesting and portability, and created the pension benefit guarantee corporation defined contributino plan - retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into that account. Money purchase plans - employer specifies a level of annual contributions. The contributions are invested, and when the employee retires, he is entitled to receive the amount of the contributions plus interest Profit-sharing and employee stock ownership plans - money goes into retirement plan. Section 401(k) plans - percentage of earnings and employers may make matching contributions. The amount of employees contribute is not taxed as part of their income until they receive it from the plan. These plans free employers from the risks that investments will not perform as well as expected. The responsibility for wise investing is with each employee. pension benefit guarantee corporation - federal agency that insures retirement benefits and guarantees retirees a basic benefit if the employer experiences financial difficulties. employers must make annual contributions of 35 per fund participant. If underfunded, have to pay more next year. Cash balance plans - retirement plan in which employer sets up an individual account for each employee and contributes a percentage of the employee's salary; the account earns interest at a predterimed rate

legal requirements - FLSA, EPA and FMLA

Equal Employment opportunity - equal pay for equal work FLSA (fair labor standards act)- Federal law that establishes a minimum wage and requirements for overtime pay and child labor. Currently 7.25. Permits lower training wage which employers may to workers under the age of 20 for a period of up to 90 days. Overtime pay - any worked over 50 hours a week, gets one and a half times the employee's usual hourly rate, including any bonuses. (exempt and non exempt) Child labor-anyone younger than 18 prevailing wages - federal contractors must pay their employees at rates at least equal to the prevailing wages in the area. Basedo n 30% of local labor force FMLA (family and medical leave act) - federal law requiring organizations with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption; to care for a seriously ill family member or for an employee's own serious illness; or to take care of urgent needs that arise when a spouse child or parent in the nation guard or reserve is called to active duty equal pay act - if men and women in an organization are doing the same thing, the employer must pay them equally.

fair labor standards act (FSLA)

Federal law that establishes a minimum wage and requirements for overtime pay and child labor

employee retirement income security act (ERISA)

Federal law that increased the responsibility of pension plan trustees to protect retirees, established certain rights related to vesting and portability, and created the pension benefit guarantee corporation

Pay grade structure and scatter diagram

First start with data, than policy line, than decide non-key jobs, than determine what group of jobs make what, than maybe decide a range for those jobs, and than plot them together, and possibly rearrange them by conditions and relatively

categories of incentive pay plans

Individual Group Organization

three labor relations management activities

Management goals are to increase the organization's profits. Managers tend to prefer options that lower costs and raise output. When an employer has recognized a union, management's goals continue to emphasize restraining costs and improving output. Managers prefer to keep their organization's operations flexible. In their labor relations, managers prefer to: Limit increases in wages and benefits, and Retain as much control

NLRA, Taft hartley, Landum Griffin

NLRA - federal law that supports collective bargaining and sets out the rights of employees to form unions union organizing joining a union, whether recognized by the employer or not going out on strike to secure better working conditions refraining from activity on behalf of the union taft hartley act mass picketing in such numbers that nonstriking employees physically cannot enter the workplace engaging in violent acts in connection with a strike threatening employees with physical injury or job loss if they do not support union activities during contract negotiations, insisting on provisions, provisions that employer may hire only workers who are union members or satisfactory, to the union, or working conditions to be determined by a group to which the employer does not belong terminating an existing contract and striking for a new one without notifying employer Also passed the right to work laws landrum-griffin act regulates unions actions with regard to their members, including financial disclosure and the conduct of elections. This law establishes and protects rights of union members. These include the right to nominate candidates for union office, participate in union meetings and secret-ballot electrons, and examine union's financial records

Union elections

NLRB is responsible for ensuring that the organizing process follows certains reps. consent election - the employer and the union seeking representative arrive at an agreement stating the time and place of the election, the choices included on the ballot, and a way to determine who is eligible to vote stipulation election - the parties cannot agree on all of these terms, so the NLRB dictates the time and place, ballot choices, and method of determining eligibility.

communicating benefits to employees

Organizations must communicate benefits information to employees so that they will appreciate the value of their benefits. This is essential so that benefits can achieve their objective of attracting, motivating, and retaining employees. Employees are interested in their benefits, and they need a great deal of detailed information to take advantage of benefits.

Types of pay for organizational performance (several)

Profits and their stock price. Profits result when an organization is efficiently providing products customers want at a price they apy. Can motivate employees to align their activities with the organization's goals. At the same time, linking incentives to the organizaiotn's profits or stock price exposes employees to a high degree of risk. Therefore these kinds of incentives pay are likely to be most effective in organizations that emphasize grown and innovation, which tend to need employees who thrive in a risk-taking environment. profit sharing - incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary. encourage employees to think more like owners. More likely to cooperate. If company isn't doing well, there isn't any incentive bonus to pass out. So safer Not proven to be effective yet. Stock ownership - actually makes employees part owners of the organization. Encourage to focus on organization as a whole. The drawbacks are similar to those as profit sharing. May not see the link to their actions and stock prices. The link between performance is harder to appreciate because the financial benefits mostly come when the stock is sold. Stock options - rights to buy a certain number of shares of stock at a specified price. They are offered a stock at a certain share. IF the stock price rises over the year, they can exercise their right and sell their stock at the point, and make a profit from the original number. If it drops below it, they don't have to exercise employee stock ownership plan - an arrangement in which the organization distributes share of stock to all its employees by placing it in a trust. Regular receive reports. Could take away significant value

Pay during Military Duty and executives

Uniformed services employment and reemployment rights act (USERRA) - requires employers to make jobs available for their workers when they return after fulfilling military duties for up to five years. Some pay the difference between what the military pays, and what their salary was. Some policies help as well pay for executives - average ceo with company earning of 5 mil makes 400,000. Most ceo compensation takes the form of performance related pay such as stock and bonus. To assess the fairness of this ratio, equity theory would consider not only the size of executive pay relative to pay for other employees but also the amount the CEO contribute. An organization executives potentially have a much grater effect on the organization's performance than its lowest-paid employees have. But they do not seem to contribute over 200 times more.

cafeteria-style plan

a benefits plan that offers employees a set of alternatives from which they can choose the types and amounts of benefits they want

strike

a collective decision by union members not to work until certain demands or conditions are met

balanced scorecard

a combination of performance measures directed toward the company's long - and short-term goals and used as the basis for awarding incentive pay

balanced scorecard

a combination of performance measures directed toward the company's long and short term goals and used as the basis for awarding incentive pay. would have financial goals to satisfy its stockholders, quality, and price related goals to satisfy customers, and efficiency goals to ensure better operations. Takes advantages of different incentive pay plans, it helps employees understand the organization's goals. exp: performance category, critical successful factors, base, target, stretch

unemployment insurance

a federally mandated program to minimize the hardships of unemployment through payments to unemployed workers, help in finding new jobs, and incentives to stabilize employment

unemployment insurance

a federally mandated program to minimize the hardships of unemployment through payments to unemployed workers, help in finding new jobs, and incentives to stabilize employment. provides payments to offset lost income during involuntary unemployment, and helps them find new jobs. Funding comes from federal and state taxes on employers. Different levels of income depends on how much owed. The size of the unemployment insurance tax imposed on each employer depends on the employer's experience rating - the number of employees the company laid off in the past and the cost of providing them with unemployment benefits to receive benefits you have four conditions: 1. they meet requirements demonstrating they had been employed (often 52 weeks) 2. they are available for work 3. they are actively seeking work. this requirement includes registering at the local unemployment office 4. They were not discharged for cause, did not quit voluntarily, and are not out of work because of a labor dispute.

scanlon plan

a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard

pay policy line

a graphed line showing the mathematical relationship between job evaluation points and pay rate

Preferred provider organization (PPO)

a health care plan that contracts with health care professionals to provide services at a reduced fee and gives patients financial incentives to use network providers

benchmarking

a procedure in which an organization compares its own practices against those of successful competitors Pay surveys Trade and industry groups Professional groups Bureau of Labor Statistics (BLS) Society for Human Resource Management (SHRM) WorldatWork

employee wellness program (EWP)

a set of communications, activities, and facilities designed to change health-realted behaviors in way that reduce health risks

pay range

a set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job or a job within a particular pay grade

pay differential

adjustment to a pay rate to reflect differences in working conditions or labor markets

associate union membership

alternative form of union membership in which members receive discounts on insurance and credit cards rather than representation in collective bargaining

job evaluation

an administrative procedure for measuring the relative internal worth of the organization's jobs

employee stock ownership plan

an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust

american federation of labor and congress of industrial organizations

an association that seeks to advance the shared interests of its member unions at the national level

union steward

an employee elected by union members to represent them in ensuring that the terms of the labor contract are enforced

goals of labor unions

bor unions have the goals of obtaining pay and working conditions that satisfy their members and of giving members a voice in decisions that affect them. They obtain these goals by gaining power in numbers. Unions want to influence the way pay and promotions are determined. checkoff provision Contract provision under which the employer, on behalf of the union, automatically deducts union dues from the employees' paychecks. membership security - Closed shop Union shop Agency shop Maintenance of membership

corporate campaigns

bringing public, financial, or political pressure on employers during union organization and contract negotiation

arbitration

conflict resolution procedure in which an arbitrator or arbitration board determines a binding settlement

checkoff provsion

contract provision under which the employer, on behalf of the union, automatically deducts union dues from employees' paychecks

alternatives to job based pay: broad-banding/delayering, skill-based pay systems

delayering - Reducing the number of levels in the organization's job structure. More assignments are combined into a single layer. These broader groupings are called broad bands. More emphasis on acquiring experience, rather than promotions Skill-based system - Pay structures that set pay according to the employees' levels of skill or knowledge and what they are capable of doing. This is appropriate in organizations where changing technology requires employees to continually widen and deepen their knowledge.

pension benefit guarantee corporation

federal agency that insures retirement benefits and guarantees retirees a basic benefit if the employer experiences financial difficulties

national labor relations board

federal gov agency that enforces the nlra by conducting and certifying representation elections and investigating unfair labor practices

family medical leave act (FMLA)

federal law requiring organizations with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption, to care for a seriously ill family member or own, urgent needs for army. Also must guarantee these employees a same or a comparable job when they return to work. Does not cover less than one year of service, fewer than 25 hours a week, or are among the organizations top 10% highest paid.

family and medical leave act (FMLA)

federal law requiring organizations with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption; to care for a seriously ill family member or for an employee's own serious illness; or to take care of urgent needs that arise when a spouse, child, or parent in the national guard or reserve is called to active duty

Consolidated Omnibus budget reconciliation act (COBRA)

federal law that requires employers to permit employees or their dependents to extend their health insurance coverage at group rates for up to 36 months following a qualifying event, such as a layoff, reduction in hours, or the employee's death

national labor relations act

federal law that supports collective bargaining and sets out the rights of employees to form unions

labor relations

field that emphasizes skills that managers and union leaders can use to minimize costly forms of conflict and seek win win situations to disagreements 1. labor relations strategy - the decision involves whether the organization will work with unions or develop nonunion operations 2. negotiating contracts - contract negotiations in a union setting involve decisions about pay structure, job security, work rules, workplace safety and others 3. administering contracts - day to day activities in which union members and the organizations may have disagreements

labor relations

field that emphasizes skills that managers and union leaders can use to minimize costly forms of conflict and seek win-win solutions to disagreements

incentive pay

forms of pay linked to an employee's performance as an individual, group member, or organization member

Incentive pay

forms of pay linked to an employee's performance as an individual, group member, or organization member. tie incentives based on their costs, expected influence on performance, profits, or other measures influential because the amount paid is linked to certain predefined behaviors or outcomes. Commission, bonus extra money.

gainsharing: scanion, Rucker, and improshare plans:

gainsharing - group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees. Gainsharing frees employees to determine how to improve their own and their group's performance. Keeps the performance measures within a range of activity that most employees believe they can influence. exp: 30000 gain, half company and half would be split among the employees in the factory. Knowing if they help the company be more successful, they're rewarded Succeeds with these: 1. management commitment 2. need for change or strong commitment to continuous improvement 3. management acceptance and encouragement of employee input 4. high levels of cooperation and interaction 5. employment security 6. information sharing on productivity and costs 7. goal setting 8. commitment of all involved parties to the process of change and improvement 9. performance standard and calculation that employees understand and consider fair and that is closely related to managerial objectives 10. employees who value working in groups scanlon plan - a gainsharing program in which employees receive a bonus in the ratio of labor costs to the sales value of production is below a set standard. rucker - cost saving worker incentive plan based on a formula that relates labor costs to labor's share of production costs, or to a standard such as an economic productivity index improshare - improved productivity through sharing. Group incentive plan aimed at reducing the cost of production. Workers share a fixed percentage of the savings resulting from production costs coming lower than a pre-established standard cost group bonuses adnt sam awards - usually for smaller work groups.

gainsharing

group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees

patient protection and affordable care act

health care reform law passed in 2010 that includes incentives and penalties for employers providing health insurance as a benefit

Affordable care act

health care reform law passed in 2010 that includes incentives and penalties for employers providing health insurance as a benefit. challenged by 26 states, upheld on the major portions of the legislation requirements of insurance companies. a bunch of rules i hope we don't have to know children 26. under 25 company is tax credit stuff 50 or more do not do it have to pay pentaly

benefits required by law

importance of benefits - laws require employers to provide certain benefits. Also tax laws make it beneficial social security - flat payment tax on employees and employers unemployment insurance - payroll tax on employers that depends on state requirements and experience rating workers' compensation insurance - provide coverage according to state requirements Premiums depend on experience rating family and medical leave - up to 12 weeks of unpaid leave for childbirth, adoption, or serious illness health care - provisions of 2010 law phased through 2014 HMO, PPO, EWP

commissions

incentive pay calculated as a percentage of sales

profit sharing

incentive pay in which payments are a percentage of the organization's profits and do not become part of the employee's base salary

straight piecework plan

incentive pay in which the employer pays the same rate per piece, no matter how much the worker produces

differential piece rates

incentive pay in which the piece rate is higher when a greater amount is produced

long-term disability insurance

insurance that pays a percentage of a disabled employee's salary after an initial period and potentially for the rest of the employee's life

short-term disability insurance

insurance that pays a percentage of a disabled employee's salary as benefits to the employee for six months or less

elements of total financial compensation

job structure - consists of the relative pay for different jobs within the organization. It establishes relative pay among different functions and different levels of responsibility. exp: differecne in pay between an entry level position and manager. Pay level - average amount and bonuses the organization pays for a particular job. Together they make up the *pay structure*, that helps the organization achieve goals related to employee motivation, cost control, and the ability to attract and retain talented human resources. Typically, the amount a person earns depends on the individual's qualifications, accomplishments, and experience. Legal requirements - equal pay for equal work, minimum wage, overtime pay, restrictions on child labor (legal requirements notecard) market forces - product markets - organizations that offer competing goods and service. Cost of labor is significant to these companies. Place an upper limit is most important when labor costs are a large part of an organization's total cost labor markets - workers prefer higher paying jobs and avoid employers that offer less money for same type of job. competition for labor establishes the minimum an organization must pay to hire an employee for a particular job. organization's goals - high-quality workforce, cost control, equity and fairness - What they think employees in other organizations earn for doing the same job. What they think other employees holding different jobs within the organization earn for doing work at the same or different levels. What they think other employees in the organization earn for doing the same job as theirs. legal compliance pay rates - base pay directly correlates to market research pay grades - sets of jobs having similar worth or content, grouped together to establish rates of pay pay ranges - a set of possible pay rates defined by a max, min, and midpoint, of pay for employees holding a particular job or a job within a particular pay grade pay differentials - adjustment to a pay rate to reflect differences in working conditions or labor markets

craft union

labor union whose members all have a particular skill or occupation

exempt employees

managers, outside sales-people, and any other employees not covered by the FLSA requirement for overtime pay

familiarity with the north american trade unions

national education association service employees inter nation union international brotherhood of teamsters american federation of state county and municipal employees united food and commercial workers american federation of teachers communication workers of america

collective bargaining

negotiation between union representatives and management representatives to arrive at a contract defining conditions of employment for the term of the contract and to administer that contract

social security act of 1935

old age insurance and employment insurance. Later added, survivors, disability, health. (OASDHI) - informally known as social security act. This program covers 90% of U.S. employers. Meet eligibility requirements receive the retirement benefits according to their age and earnings history. The amount raises if they wait to claim it.

unions

organizations formed for the purpose of representing their members' interests in dealing with employers

optional benefits (many)

paid leave - most flexible approach employer pools personal days, sick days, and vacation days for employees to use as the needs arises Vacation Holidays Sick Leave Personal Days Floating Holidays Jury Duty Funerals Military Duty Time Off to Vote group insurance - medical insurance 70% of all full-time employees in the U.S. receive medical benefits Policies typically cover: Hospital expenses Surgical expenses Visits to physicians Additional coverage may include: Dental care Vision care Birthing centers Prescription drug programs mental health parity act 1996 - The law equates aggregate lifetime limits and annual limits for mental health benefits with aggregate lifetime limits and annual limits for medical and surgical benefits. (Typical caps for mental illness coverage are $50,000 for lifetime and $5,000 for annual, as compared with $1 million lifetime and no annual cap for other physical disorders.) The law covers mental illnesses (i.e., "mental health services," as defined under the terms of individual plans); it does not cover treatment of substance abuse or chemical dependency. The law applies only to employers that offer mental health benefits; it does not mandate such coverage. Life insurance - may provide or opportunity to buy. term life insurance - iif the employee dies during the term of the policy, the employee's beneficiaries receive a death benefit payment. Usually twice the employee's yearly pay. disability insurance - short term - insurance that pays a percentage of a disabled employee's salary as benefits to the employee for six months or less long term - insurance that pays percentage of a disabled employees salary after an initial period and potentially for the rest of the employees life usually 50-70%

processes that make incentives work

participation in decisions - in pay related decisions can be part of a general move toward employee empowerment. If employees are involved in decisions about incentive pay plans and employees' eligibility for incentives, the process of creating and administering these plans can be more complex. There is also a risk that employees will make decisions that are in their interest at the expense of the organization communication - demonstrates to employers that the pay plan is fair. Also, when employees understand the requirements of the incentive pay plan, the plan is more likely to influence their behavior as desired

pay structure: Pay policy line, Pay grades and ranges

pay structure should reflect what the organization knows about market forces, as well as its own unique goals and the relative contribution of each job to achieving them organizations typically apply the information by establishing some combination of pay rates, pay grades and pay ranges. Hourly wage, piecework rate, and salary pay rates- first they take market research of key jobs for pay. Determine salaries for non-key jobs within organization. Create a pay policy line, plots of points according to the job evaluation and pay rate for reach job. Reflects the pay structure in the market. A graphed line showing the mathematical relationship between job evaluation points and pay rate when job structure and market datda conflict, organizations have to decide on a way to resolve the two. One way is to stick with job evaluations. Or organization could base pay entirely on market forces. However has some drawbacks pay grades - group jobs, smilier content and worth, payment aligns with them. Drawback to pay grade, will result in rates of pay for individual jobs that do not precisely match the levels specified by the market and the organizations structure pay ranges - being able to pay the highest achieving employee in that group of jobs. use market rate or pay policy line as midpoint and than the range based on market surveys. Usually most common for white-collar jobs and for jobs not covered by union contracts. Usually pay ranges overlap red-circle rate - pay at a rate that falls above the pay range for the job green-circle rate - pay at a rate that falls below the pay range for the job Pay differentials - paying someone by relatively. Such as working night shift or be location.

defined-benefit plan

pension plan that guarantees a specified level of retirement income

types of pay for individual performance

piecework rates - a wage based on the amount workers produced. used for above-average production volume. - straight piecework plan - incentive pay in which the employer pays the same rate per piece, no matter how much the worker produces - differential piece rates - incentive pay in which the piece rate is higher when a greater amount is produced. studies show that production can increase by this incentive. Best suited for routinue, standardized jobs with output easy to measure standard hour plans -plan that pays workers extra for work done in less than a preset (standard time) - people work as fast as they can but not necessarily as careful or care as much about quality merit pay - a system of linking pay increases to rating on performance appraisals -predetermined grid which determines salary increase. - based on compa-ratio -split into pre-salary such as relatively low earnings but highest performer gets biggest salary increase compared to someone already making a lot - helps get paid for all aspects the company values -can become very expensive to the employer. makes assumptions that may be misleading. individual bonuses - employee must re-earn them during each performance period. adds flexibility with pay sales commissions - incentive pay calculated as a percentage of sales. - straight commission plan - straight commissions re common among insurance and real estate agents and car salespeople. No salary, only commissions. hard-drivig, ambitious, risk taking salespeople might enjoy the potential rewards of a straight commission plan.

hourly wage

rate of pay for each hour worked

piecework rate

rate of pay for each unit produced

salary

rate of pay for each week., month, or year worked

Compa-Ratio

ratio of average pay to the midpoint of the pay range. Assuming the organization has pay grades, the organization would find a compa-ratio for each pay grade: the average paid to all employes in the pay grade divided by the midpoint for the pay grade. If the average equals the midpoint, the comp ratio is 1. More often, the comp-ratio is somewhat above 1.

delayering

reducing the number of levels in the organization's job structure

summary plan description

report that describes a pension plan's funding, eligibility requirements, risks, and other details

contributory plan

retirement plan funded by contributors from the employer and employee

noncontributory plan

retirement plan funded entirely by contributions from the employer

cash balance plan

retirement plan in which the employer sets up an individual account for each employee and contributes a percentage of the employees salary; the account earns interest at a predefined rate

defined-contribution plan

retirement plan in which the employer sets up an individual account for each employee and specifies the size of investment into that account

stock options

rights to buy a certain number of shares of stock at a specified price

pay grades

sets of jobs having similar worth or content, grouped together to establish rates of pay

incentive pay for executives

short term - bonuses based on years profits, return on investment. long term - stock options and stock purchase plans balanced scorecard approach is useful in designing executive pay. combines measures of whether organization is delivering value to shareholders, customers, and employees. Regulators and shareholders have pressured companies to do a better job of linking executive pay and performance. The sec has required companies to more clearly report exec compesniion levels ethical issues - when linked to stock, executives need ethical backbone to be honest about their company's performance even when dishonesty or clever shading of the truh offers the tempting potential for earnings.

process of organizing

signing authorization cards petition for election election campaign election and certification

Comparable worth

some people have undervalued work performed by women, in particular, placing a lower value on occupations traditionally dominated by women. This policy uses job evaluation to establish the worth of an organization's jobs in terms f such criteria as their difficulty and their importance to the organization. The employer then compares the evaluation points award to each job with the pay for each job. If the job has similar evaluation points, they should be paid equally. Comparable-worth policies are controversial. From an economic standpoint, raising pay for some jobs places the employer at an economic disadvantage relative to employers that pay the market rate. Companies can defend themselves by paying the market rate

right to work laws

state laws that make union shops, maintenance of membership, and agency shops illegal

right to work states

state laws that make union shops, maintenance of membership, and agency shops illegal. The idea behind such laws is that requiring union membership or the payment of union dues restricts employees' right to freedom of association.

workers' compensation

state programs that provide benefits to workers who suffer work-related injuries or illnesses, or to their survivors

worker's compensation

state programs that provide benefits to workers who suffer work-related injuries or illnesses, or to their survivors. these laws operate under a principle of no fault liability - meanignt hat an employee does not need to show that the employer was grossly negligent in order to receive compensation, and the employer is protected from lawsuits. He loses protection if he intentionally contributes to a dangerous workplace. about 9 out of 10 us workers are covered by state workers benefits fall into: 1. disability income 2. medical care 3. death benefits 4. rehabilitative services

social security

the federal old age, survivors, disability, and heath insurance (OASDHI) program, which combines old age insurance, survivor's insurance, disability insurance, hospital insurance, and supplementary medical insurance for the elderly

minimum wage

the lowest amount that employers may pay under federal or state law, stated as an amount of pay per hour

experience rating

the number of employees a company has laid off in the past and the cost of providing them with unemployment benefits

grievance procedure

the process for resolving union-management conflicts over interpretation or violation of a collective bargaining agreement

job structure

the relative pay for different jobs within the organization

core compensation: base pay and adjustments (no idea what to put so) issues in developing a pay structure

the size of the range depends on the details of the organization's competitive environment. If many workers are competing for a few jobs, employers will have more choice. Similarly, employers can be more flexible about pay policies if they use technology and work design to get better results form employees than their competitors do. Hourly wage Piecework rate Saalary

fact finder

third party to collective bargaining who reports the reasons for a dispute, the views and arguments of both sides, and possibly a recommended settlement, which the parties may decline

Compensation system goals

to conduct a job evaluation, people identify each jobs compensable facts. Characteristics of a job that the organization values nd chooses to pay for. Experience Education Complexity Working conditions Responsibility

union shop

union security arrangement that requires employees to join the union within a certain amount of time (30 days) after beginning employment

agency shop

union security arrangement that requires the payment of union dues but no union membership

closed shop

union security arrangement under which a person must be a union member before being hired; illegal for those covered by the national labor relations act

maintenance of membership

union security rules not requiring union membership but requiring that employees who join the union remain members for a certain period of time


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