HRM Final Short Answers

Compensation is a systematic approach to providing some sort of value to employees in exchange for the work performed. Types/examples are base pay, commission, benefits, overtime, bonuses, profit sharing, incentive plans, stock ownership, promotions, merit pay, cost of living, and nonmonetary rewards. Objectives include firm profitability achieved by fulfilling the company mission through efficiency, performance, cost control, customer focus, quality, compliance, and publicizing equity. Internal Compensation policy techniques include: job analysis, job description, job evaluation, and internal work structure

Discuss Compensation:

-working conditions -stress -lack of training -no safety policies -no specific goals -no inspections -not having the right supplies

Explain what causes unsafe acts.

Portability is the transfer of an employee's vested rights from one organization to another; it makes it easier for employees who leave the firm prior to retirement to take their accumulated pension funds with them. It is important to today's young workers because young workers usually tend to switch and change their jobs often throughout their work career. So, young workers are able to take these funds with them during their job-hopping cycle.

What is portability? Explain how it is important to young workers today.

1.) Promotions may be made to recognize experience and contribution in the current position but a physical move to a higher level vacant position. 2.) Normally promotions are linked to current performance levels and a person's capacity to handle higher levels of responsibility 3.) Rules of thumb based on performance levels at large firms: - A = 3 promotions (every 8-10 years) - AA = 5 promotions (every 5-7 years) - E = 8 promotions (every 3-4 years) - O = unlimited (every 1 1/2- 2 years) 4.) Promotional raises normally vary from zero to 5% per promotion level

4 Promotional Guidelines (must be stated in Salary Administration):

1.) When there is no change in performance from one budget year to another, the employee should receive the same % merit raise under normal conditions. 2.) When there is a performance level increase, the employee should receive a higher % merit raise to recognize the increased contribution. 3.) When there is a performance level decrease, the employee should receive a lower % merit raise in order to reflect the lower contribution and call attention to the drop in performance. 4.) The % merit raise given to an employee should be sustainable for the foreseeable future (approx. 5 years). 5.) When the contemplated % merit raise is not sustainable, the % merit raise must be reduced to a level that is sustainable for the given % merit raise. 6.) Merit raises are usually provided on an annual basis

6 General Merit Raises Guidelines (must be stated in Salary Administration):

1.) Pieceworks plan- oldest and most popular; based on the # of items processes by each individual worker in a unit of time 2.) Nonfinancial plan- recognition based awards; examples include gift certificates, merch, work benefits, etc. 3.) Profit sharing plan- employees share the firm's annual profits 4.) Earnings at Risk Plan- puts some portion of employees' normal pay at risk if they do not meet their goals 5.) Employee Stock Ownership Plan (ESOP)- employer contributes stock to a trust for eventual use by employers 6.) Gainsharing- engages employees in a common effort to achieve productivity objectives and share the gains

Compare and contrast 6 types of incentive plans:

Broad banding is consolidating salary grades and ranges into just a few wide levels or "bands," in which each contains a relatively wide range of jobs and salary levels. Pros: -greater flexibility for employee assignments -all do each others' jobs; same pay Cons: -can be unsettling -long period of classification -no recognition steps -demotivates some workers

Define broad banding and list the pros and cons.

The basic philosophy of salary administration is to motivate, prevent/correct salary inequities, and control costs by not overpaying for the employee's contribution value. State the 6 General Merit Raises Guidelines: State the 3 Salary Band Issues: State the 4 Promotional Guidelines:

Discuss Salary Administration:

1.) "Walk the Talk" - supervisors exhibit ethical behaviors 2.) Encourage whistleblowers - the use of hotlines on the company when discovering fraud 3.) Enforce the rules - knowing one's behavior is being monitored and rules enforce biggest impact 4.) Have ethic Policies and Codes - signals that their company is serious about ethics

Discuss at their four specific HR tools managers use to influence ethical behavior at work

COBRA= Consolidated Omnibus Budget Reconciliation Act Requires most private employers to continue to make health benefits available to separated employees and their families Former employee must pay for the coverage; separated employees should sign a form acknowledging that they received and understand the rights

Discuss/explain COBRA

Ranking -simplest method -involves ranking each job relative to all other jobs based on overall job difficulty -too subjective; courts do not like this Classification/Grading: -categorizing jobs into groups; all jobs in each group are roughly the same value for pay purposes -common in a public sector Point Method: -a # of compensation factors are identified and then the degree to which each of these factors is present on the job is determined -common in a private sector -more objective than grading method -employee view as fair; courts like this

Discuss/explain the following job evaluation techniques: Ranking, Classification, and Point Method.

Employment Retirement Income Security Act: -sets minimum standards for most voluntarily established pension and health plans in private industry -requires written pension plan documents and adhere to guidelines -requires those who control the plans to act responsibly and in the best interest of partcipants

Explain how ERISA protects employee's pension rights.

Workplace violence- the threat/act of violence against workers on or off the job Warning signs: -an act of violence on or off the job -overly confrontational or antisocial behavior -sexually aggressive behavior -isolationist or loner behavior -tendency to overreact to criticism -insubordinate behavior with threat of violence -possession of weapons in workplace

Explain workplace violence and list at least 7 warning signs of a potentially violent employee.

1.) Teamwork in the form of management and employees invovled in safety 2.) Highly visible and interactive communication and collaboration on safety matters 3.) A shared vision of safety excellence (specially an overriding attitude that all accidents and injuries are preventable) 4.) Assignment of critical safety functions to specific individuals or teams 5.) A continuous effort towards identifying and correcting workplace safety problems and hazards

List atleast 5 components of an effective safety program:

1.) reduce unsafe conditions 2.) reduce unsafe acts 3.) provide personal protective equipment 4.) provide safety training 5.) use posters, incentives, and positive reinforcement

List the five techniques for reducing accidents.

1.) Medical treatment (other than first aid) 2.) Loss of consciousness 3.) Restriction of work (one or most lost work days) 4.) Restriction of motion 5.) Transfer to another job

List the five types of injuries under OSHA guidelines:

1.) choose benchmark jobs 2.) select compensable factors 3.) assign weights to compensable factors 4.) convert percentages to points for each factor 5.) define each factor's degrees 6.) determine each factor's degree points 7.) review job descriptions and specifications 8.) evaluate the jobs 9.) draw the current (internal) wage curve 10.) conduct a market analysis: salary surveys 11.) draw the market (external) wage curve 12.) compare and adjust current and market wage rates for jobs 13.) develop pay grades 14.) establish rate ranges 15.) address remaining jobs 16.) correct out-of-line rates

Out of Appendix to Chapter 10 list the 16 steps into creating a market-competitive pay plan using the point plan job evaluation method.

1.) An individual's salary may be above their allowable salary range maximum. This can happen due to supervision raise grants, the company's compensation scheme being above competitive levels, or the pay policy has changed. 2.) Once a person's salary is above its range max, it is normally frozen or "red circled" until it falls below the range max. 3.) Salary bands/ranges are adjusted on a periodic basis (usually annually). This adjustment must be upward or lowered based on the annual change in the company or competitor's salary levels.

Salary Band Issues Guidelines (must be stated in Salary Administration):

Defined benefit plan- confronts a formula for determining retirement benefits; benefits are known ahead of time, employee can compute what their retirement benefits will be Defined contribution plan- specifies what contributions the employer will make to employee's retirement savings fund; contribution is defined not the pension, the employee only knows for sure what they are contributing to the plan

What is the difference between a defined-benefit plan and a defined contribution plan?

Exempt: -employee exempt from FLSA's overtime provisions -Bonafide executive, administrative, and professionals are generally exempt from minimum wage and overtime requirements -Agricultural employees and taxi drivers are always exempt Nonexempt: -Earn overtime pay; 1.5 times their normal hourly pay -Covered by the FLSA -Examples are paralegals, accounting clerks, bookkeepers, and secretaries

What is the difference between exempt and non-exempt jobs?

gainsharing is an incentive plan that engages employees in a common effort to achieve productivity objectives and share the gains

what is gainsharing?