Mangt 531 final
Identify and explain STATUTORY benefits required by law, i.e., social security, unemployment insurance, workers' compensation, etc.
-Old Age, Survivors, and Disability Insurance. (OASDI). -Workers' Compensation - Unemployment Insurance (UI) -Family and Medical Act leave, (FMLA leave). -Patient Protection and Affordable Care Act of 2010. (the ACA)
Describe the types of work/life benefits that employers may provide
-paid leave -group insurance -retirement plans -"family-friendly" benefits -other quality of work-life benefits retirement accounts, life insurance, and vacation time to a very broad group including company nap rooms, sick-child care services, and personal valets.
employee benefits required by law
-social security -unemployment insurance -worker's compensation insurance -family and medical leave -health care
Discuss benefits that involve payment for time not worked
-vacation -holiday -sick leave -personal days -floating holidays -jury duty -funerals -military duty -time off to vote
Identify the seven basic issues that make up the organization's compensation strategy.
1. Ability to Pay 2. What Types of Compensation? 3. Pay for Performance or Pay for Longevity? (Some companies pay people more for longevity or seniority, meaning accumulating years of service with the firm. If we work for this type of organization, we will likely get promotions and raises over time. Other companies, however, pay more for performance—for completing certain tasks or doing certain things faster or better than average, not just for being there and being loyal to the firm.) 4. Skill-Based or Competency-Based Pay? (If we decide to use skill-based or competency-based pay, we will pay members of the workforce for individual skills or competencies that they bring to work, whether or not those skills are necessary for the individuals to do their current job. Competencies involve the individual's level of knowledge in a particular area, while skills involve the ability to apply that knowledge set in that field.) 5. At, Above, or Below the Market? (Are we willing to pay more than necessary to hire individuals? Can we pay less than average and still get people to apply for jobs in our company?Why would we want to pay above the market? The answer is to attract better workers and enhance our employment brand.) 6. Wage Compression (occurs when new employees require higher starting pay than the historical norm, causing narrowing of the pay gap between experienced and new employees) 7. Pay Secrecy (requiring employees to not disclose their pay to anyone else)
Explain the processes of mediation and arbitration and the major difference between the two.
A mediator is a neutral third party who helps resolve a conflict but has no authority to impose a solution to the conflict. An arbitrator is a neutral third party who resolves a conflict by making a binding decision.
Briefly describe the concept of a pay structure, including broadbanding and delayering.
A pay structure is a hierarchy of jobs and their rates of pay within the organization. A trend over many years now has been to lower the number of pay levels using one of two options—either delayering or broadbanding broadbanding: is accomplished by combining multiple pay levels into one. What is the benefit of combining levels either vertically or horizontally in this way? Is it that we can make bigger groups, and bigger is always better? in this case it may be. When we lower the number of pay levels that we have to deal with, we make the process simpler. It also allows us more capacity to reward outstanding performers. delayering: is the process of changing the company structure to get rid of some of the vertical hierarchy (reporting levels) in an organization
Identify the advantages and disadvantages of both individual and group incentives.
Advantages of individual incentives: 1. Makes it easy to evaluate individual employees. 2. Offers the ability to match rewards to employee desires. 3. Promotes the link between performance and results. 4. May motivate less productive employees to work harder. Disadvantages of individual incentives: 1. Many jobs have no direct output. 2. May motivate undesirable employee behaviors. 3. Record-keeping burden is high. 4. May not fit organizational culture. Advantages of group incentives: 1. Promotes better teamwork. 2. Broadens individual outlook. 3. Requires less supervision. 4. Is easier to develop than individual incentive programs. Disadvantages of group incentives: 1. Social loafing can occur. Social loafers (or free riders) may be able to stay hidden within the group while allowing others to do the majority of the group work. 2. Individual output may be discounted. Individual effort and results may get "lost" in the group. 3. Outstanding performers may slacken efforts. 4. Group infighting may arise.
What is COBRA and what are its conditions
COBRA is a law that requires employers to offer continuation of health insurance on individuals who leave their employment for up to 18 to 36 months if the employee is willing to pay the premium cost of the insurance policy.
Discuss the organization's options when providing flexible benefit plans and why benefit plans need to be communicated to employees
Companies can choose modular plans, core-plus plans, or full-choice plans. Modular plans provide several basic modules from which each employee chooses. There is no other option outside one of the modules. Core-plus plans provide a base set of benefits to all employees (the core) and then other options that the employee can choose from freely to meet their personal desires and needs. Full-choice plans allow the employee complete freedom of choice, but they come with some potential problems such as "moral hazard," "adverse selection," and high management costs. Most employees don't understand the true cost and value of the benefits that organizations provide and, as a result, don't perceive the value that they get from having the organization provide their benefits. There are many indications that employees who are satisfied with their benefits are more satisfied with their jobs and their companies. Providing employees with knowledge concerning their benefit package will help to create and maintain trust in the organization as well as improve job satisfaction on the part of those employees.
Identify and explain the employee benefits required by law, i.e., social security, unemployment insurance, workers' compensation, etc
Employers and employees are required to provide funds for Social Security benefits. The program was created with the passage of the Social Security Act of 1935. By far the largest of the statutory US programs, in both size and cost to employers (and employees), are Social Security and Medicare. The combined cost of the Old Age, Survivors, and Disability Insurance (OASDI)—the formal name for what we generally call Social Security.
What are the basic provisions of the Family Medical Leave Act (FMLA)?
FMLA is leave that must be provided by the employer to eligible employees when they or their immediate family members are faced with various medical issues. The leave is unpaid, but the employer must maintain health coverage for the employee while they are on leave. In addition, upon the employee's return from FMLA leave, they must be restored to their original job or one that is equivalent in pay, benefits, and other terms and conditions of employment.
Describe what FMLA provides, which companies must provide FMLA leave, when employees become eligible for FMLA when working for a covered company, which conditions are covered, and what protections employees receive due to being covered by the act
FMLA provides: unpaid leave for an "eligible employee" Leave of 12 workweeks in a 12-month period for: ○ The birth of a child and to care for the newborn child within 1 year of birth ○ The placement with the employee of a child for adoption or foster care and to care for the newly placed child within 1 year of placement ○ To care for the employee's spouse, child, or parent who has a serious health condition ○ A serious health condition that makes the employee unable to perform the essential functions of their job ○ Any qualifying exigency arising out of the fact that the employee's spouse, son, daughter, or parent is a covered military member on "covered active duty" or . . . • Leave of 26 work weeks during a single 12-month period to care for a covered service member with a serious injury or illness if the eligible employee is the spouse, son, daughter, parent, or next of kin (military caregiver leave) Companies that must provide FMLA leave: Any private-sector employer if they have 50 or more employees who worked at least 20 weeks during the year, working within a 75-mile radius of a central location. When employees become eligible: • work for a covered employer; • have worked for the employer for a total of 12 months (not necessarily consecutive); or • have worked at least 1,250 hours over the previous 12 months. Conditions covered: Protections employees receive: they must be restored to their original job or one that is equivalent in pay, benefits, and other terms and conditions of employment.
Discuss the three major provisions of the FLSA and the penalties for misclassification of employees. Know the difference between an exempt and non-exempt employee.
Fair Labor Standards Act (FLSA). three major provisions: The law's major provisions cover minimum wage, overtime issues, and child labor rules for most US-based businesses. penalties for misclassification: The employer can personally be criminally prosecuted and fined up to $10,000 per infraction. there is no limit to the fines in this lawA second conviction could result in imprisonment, and in addition, employers who willfully or repeatedly violate the exemption rules may be assessed civil penalties of more than $1,100 per violation. Here, the civil penalty for child labor can be more than $11,000 per worker for each violation. can go to as much as $50,000 or even $100,000 if the violation causes the death or serious injury of an employee younger than 18 years of age exempt employee & non-exempt employee: exempt, by the definitions in the FLSA, they are exempt from the minimum wage requirement, overtime provisions, or child labor rules or possibly all three. People not meeting any of the requirements for an exemption are called nonexempt and must be paid minimum wage, overtime, and so forth.exempt employees jobs that are categorized as professional, executive, administrative jobs; salary employees. non-exempt=who have to abide by minimum wage and overtime laws; hourly employees.
Identify the 12 guidelines for creating motivational incentive systems.
Guidelines: 1. BASED ON ORGANIZATIONAL STRATEGY AND CULTURE. 2. INCENTIVES FOR ALL 3. UNDERSTANDABLE AND CLEARLY COMMUNICATED 4. BASED ON FACTORS THE TARGET CAN AFFECT 5. SMART GOALS (SMART—specific, measurable, attainable, relevant, and time based) 6. CLEARLY SEPARATE FROM BASE PAY 7. A SIGNIFICANT PIECE OF OVERALL COMPENSATION. (A good recommendation would be at least 10% of overall pay and, in some cases, 20% or more.) 8. TAKE GREAT CARE IN ADMINISTERING THE PROGRAM 9. PROMPTLY APPLY ANY INCENTIVE AWARD (timely) 10. DON'T FORGET NONMONETARY REWARDS 11. DON'T REWARD NONPERFORMERS 12. MAKE THE INCENTIVE PROGRAM PART OF A COMPREHENSIVE APPROACH TO MANAGING PEOPLE. (We can't create an incentive for every aspect of every job in most organizations, so we have to continue to evaluate and reward overall performance so that our employees know that they have to do all tasks successfully, )
Describe an HMO, a PPO, and a HDHP. (What are the elements of a Health Savings Account?) How are these plans different from each other?
HMOs are managed care programs. An HMO is a health care plan that provides both health maintenance services and medical care as part of the plan. This is health care that provides the patient with routine preventive care, but in the case of nonpreventive care, it requires that a review of specific circumstances concerning the individual and their health condition be completed before any significant medical testing, medical procedures, or hospital care is approved.In the HMO form of managed care, the insured person will generally be required to use doctors and facilities in the network. The employee (and their family, if covered) will choose a primary care physician (PCP) Preferred provider organizations (PPOs) are a kind of hybrid between traditional fee-for-service plans and HMOs.PPOs have networks of physicians and medical facilities, just like HMOs. PPOs act like HMOs in that they prefer (but do not require) that you have a PCP within their medical network and that you go to that PCP before going elsewhere for medical care.However, PPOs do not require that you have a referral from the PCP to see a specialist.advantages of PPOs include the ability to see any physician and use any medical facilities (as with a traditional plan), which in turn relieves the individual insured by the PPO of the necessity to live within certain geographical boundaries. However, unlike with HMOs, the cost of care can be significantly higher if the individual chooses to go outside the preferred providers that are identified as PPO participants. HDHP. A high-deductible health plan (HDHP) is a "major medical" insurance plan that protects against catastrophic health care costs and in most cases is paid for by the employer. A very common HDHP would pay for medical costs in any given year that total more than $10,000. So if an individual exceeded the $3,350 in their HSA, they would be responsible for out-of-pocket costs of a maximum of $6,650, at which time the HDHP would take over and pay the remaining costs of the individual's health care for the year.
COBRA and HIPAA
If employers choose to provide health insurance, we have to abide by the Consolidated Omnibus Budget Reconciliation Act (COBRA) law. COBRA is a law that requires employers to offer to maintain health insurance on individuals who leave their employment (for a period of time). The individual former employee has to pay for the insurance, but the employer is required to keep the former employee on their group insurance policy. HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 (HIPAA). The Health Insurance Portability and Accountability Act (HIPAA) is another health insurance mandate from the federal government that applies if the company provides health insurance to its employees. Only part of the HIPAA law applies directly to all employers.
statutory benefits required by law
In 1935, Social Security laws were passed that required companies to provide employees with old-age, survivor, and disability benefits. Congress has added other mandatory benefits such as: -unemployment, UI -workers' compensation, -family and medical leave FMLA -and the Affordable Care Act or ACA
Discuss the major reasons why companies use incentive pay.
Incentives allow us to vary the reward based on the individual (or group) effort put into the work process. People respond to incentives, and rewards and recognition are combined to create motivational incentive systems. it is a tool that will allow us to provide greater rewards to the best people in our organization. We are rewarding them for their past performance, but we are doing it in the hope that they will want similar rewards in the future and therefore will repeat the desired behaviors. second reason why we use variable pay in organizations moves some of the risk associated with having employees (and the associated payroll costs) from the firm to the individual. Our final reason for incentive pay ties into company strategy we can't get the right people to accomplish organizational objectives without providing some incentives to do so.
Identify the three types of job evaluation and discuss whether they are more objective or subjective in form.
Job-Ranking Method: this determination requires judgment and is highly subjective. Point-Factor Method: they break a job down into components like particular skills or abilities, and then they assign a number of points to each component based on its difficulty. objective. Factor Comparison Method: first identifies a group of benchmark jobs—positions that are identified and evaluated in a large number of organizations and that can generally be found in most pay surveys. Because the factor comparison method uses both point factors and ranking, it has both objective and subjective components.
Explain the TIPS acronym for guiding supervisors with respect to their activities to stop unionization. Next explain the FOE acronym
NO TIPS stands for no Threats, no Interrogations, no Promises, and no Spying. A lot of organizations use the acronym NO TIPS to identify what the company and its managers can't do • No Threats. Managers in the firm can't threaten employees by telling them that the company will shut down a facility that votes for unionization and send the work elsewhere, maybe overseas. • No Interrogations. The manager is prohibited from calling individual employees into the manager's office and asking them about union organizing activities on the part of others in the workforce. • No Promises. Management cannot promise employees that if they vote against union authorization, they will receive raises or changes in their benefits package. • No Spying. Management is prohibited from planting individuals in union organizing meetings or other activities so that those individuals can report back to management on what is being discussed or who attends the meetings. FOE:
Discuss what management can do to limit union organizing efforts. (FOE)
NO UNIONIZATION ON COMPANY TIME. MANAGEMENT'S POSITION ON UNIONIZATION. (management of the firm can identify the costs associated with union membership (such as dues), as well as limits that may be imposed on promotions or compensation increases based on merit if the employees choose to unionize.) CHANGE AGREEMENTS AND USE OF NONUNION EMPLOYEE REPRESENTATION. (management also has a right to change working agreements, even during a period when union organizers are soliciting their workforce, to show that they are responsive to their employees' needs.) FOE: what the employer can do during union organizing Facts ("unions can make all the promises they want but any agreement has to be negotiated and agreed to by both parties") Opinions ("I don't think we need a third party between management and our workers") Examples (cite examples of what has happened with unions elsewhere)
Briefly discuss 6 options for individual incentives.
Options: 1. Bonus (payment, typically given to an individual at the end of a time period) 2. Commissions (payment provided to a salesperson for selling an item to a customer and is paid as a percentage of the price of an item that is sold) 3. Merit Pay (a program to reward top performers with increases in their annual wage that carry over from year to year) 4. Piecework Plans (an incentive to produce at a higher level because the more workers produce, the more they get paid) 5. Standard Hour Plans (each task is assigned a "standard" amount of work time for completion) 6. Giving Praise and Other Nonmonetary Incentives
Briefly discuss 5 options for group-based incentives and for organizational incentives.
Options: 1. Profit-Sharing Plans (provide a portion of company proceeds over a specific period of time (usually either quarterly or annually) to the employees of the firm through a bonus payment) 2. Gainsharing Plans (the gain (in either profit or some other factor) is shared with the employees who helped to create the gain) 3. Employee Stock Ownership Plan (ESOP) (allows at least part of the stock in the company to be provided GIVEN to the employees over a period of time based on some formula) 4. Stock Options (to allow them to BUY a certain number of shares of stock in the company at a SPECIFIED point in the future, but at a price that is set when the option is offered.) 5. Stock Purchasing Plans (they let qualifying employees BUY the stock essentially ANYTIME, usually at a discount)
Discuss the 5 major reasons why incentive plans fail and the 4 challenges involved.
Reasons incentive plans fail: 1. POOR MANAGEMENT 2. COMPLICATED PROGRAMS 3. THE PLAN DOESN'T REALLY INCREASE REWARDS, OR IT PROVIDES INSIGNIFICANT REWARDS 4. EMPLOYEES CAN'T AFFECT THE DESIRED OUTCOMES 5. EMPLOYEES DON'T KNOW HOW THEY ARE DOING Challenges: 1. Do incentives work? 2. Do incentives become entitlements? 3. Will employees only do what they get paid for? 4. Extrinsic rewards may decrease intrinsic motivation?
Identify the major labor laws in the United States and the other legal issues in labor relations.
The Railway Labor Act (RLA) of 1926: to significantly limit the potential for railroad strikes to affect interstate commerce by hindering the general public. The National Mediation Board (NMB) was created in an amendment to the RLA to mediate between management and labor to help them come to an agreement. The National Labor Relations Act (NLRA) of 1935 (Wagner Act): Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities The Labor Management Relations Act (LMRA) of 1947 (Taft-Hartley Act): an amendment to the 1935 NLRA. Whereas the NLRA identified a series of employee rights and employer unfair labor practices, the LMRA attempted to rebalance employer and employee rights. The Labor Management Reporting and Disclosure Act of 1959 (Landrum-Griffin Act or LMRDA): passed to protect union members from discriminatory union practices. The Worker Adjustment and Retraining Notification Act of 1988 (WARN Act): was passed to give employees 60 days advance notice in cases of plant closings or large-scale layoffs.
Identify and explain statutory benefits required by law, i.e., social security, unemployment insurance, workers' compensation, etc.
The first of our statutory benefits in the United States is Old Age, Survivors, and Disability Insurance. Social Security and Medicare: By far the largest of the statutory US programs, in both size and cost to employers (and employees), are Social Security and Medicare. the Old Age, Survivors, and Disability Insurance (OASDI)—the formal name for what we generally call Social Security Medicare programs. Workers' Compensation (is an insurance program designed to provide medical treatment and temporary payments to employees who cannot work because of an employment-related injury or illness.) Workers' compensation is a type of "no-fault" insurance, which means that no matter which party—the employer or the employee—was at fault in an accident- or illness-related situation, the insurance will be paid out to the party harmed. The third statutory benefit is Unemployment Insurance. Unemployment Insurance (UI) provides workers who lose their jobs with continuing subsistence payments from their state for a specified period of time. The next mandatory benefit is Family and Medical Act leave, more commonly known as FMLA leave. FMLA requires that the employer provide unpaid leave for an "eligible employee" when they are faced with any of the following situations:Leave of 12 workweeks in a 12-month period for: ○ The birth of a child and to care for the newborn child within 1 year of birth ○ The placement with the employee of a child for adoption or foster care and to care for the newly placed child within 1 year of placement ○ To care for the employee's spouse, child, or parent who has a serious health condition ○ A serious health condition that makes the employee unable to perform the essential functions of their job ○ Any qualifying exigency arising out of the fact that the employee's spouse, son, daughter, or parent is a covered military member on "covered active duty" or . . . • Leave of 26 workweeks during a single 12-month period to care for a covered service member with a serious injury or illness if the eligible employee is the spouse, son, daughter, parent, or next of kin (military caregiver leave) The last mandatory benefit is the Patient Protection and Affordable Care Act of 2010. (the ACA) This act mandated that all employers with more than 50 employees provide their full-time employees with health care coverage or face penalties for failing to do so.
Discuss the issue of executive compensation and how the major provisions of the Dodd-Frank Act affect the issue.
There is no doubt that in some cases, executive compensation has gotten out of control. However, research shows that overall executive pay only runs about four times the pay of an average employee in most firms, which means that as a general rule, executive pay is probably not out of line, considering the pressure on executives to perform at the highest level all the time. Dodd-Frank Act Provisions: 1. SHAREHOLDER "SAY ON PAY" AND "GOLDEN PARACHUTE" VOTES. Among the most significant provisions of the act is that shareholders must be allowed to vote on compensation packages for their executive officers at least once every 3 years. Shareholders also have a vote on "golden parachute" payments to executives who are forced out of the company because of a merger or acquisition. 2. EXECUTIVE COMPENSATION RATIOS. Other provisions in Dodd-Frank include a requirement that every public company disclose the total compensation of the CEO and the total median compensation of all employees and provide a ratio of these two figures 3. Another provision of Dodd-Frank is that all public firms will be required to provide information on the relationship between executive compensation and the total shareholder return of the company each year. to allow shareholders to evaluate the performance of companies in which they own stock.
Describe what organizations and managers can do to address wage compression.
Wage compression is another concern in setting up a pay structure. Wage compression occurs when new employees require higher starting pay than the historical norm, causing narrowing of the pay gap between experienced and new employees. If we understand wage compression when creating a pay structure for the organization, we can avoid at least some of the dissatisfaction associated with the pay differentials between short-term and long-term employees. Many managers think that one of the solutions to deal with this issue is pay secrecy, which means requiring employees to not disclose their pay to anyone else. But the NLRB has consistently ruled over the past several years that companies may not discipline workers who reveal information about their pay and other work conditions as long as the workers are participating in "protected, concerted activity," and the NLRB views this activity very broadly. As a result of these rulings, any company that continues to function with pay secrecy rules and that uses those rules to discipline employees in any way may be charged by the NLRB with violating the NLRA. So, enforcing pay secrecy clauses is becoming more dangerous to companies. Open companies, where large amounts of corporate information are available to everyone in the organization, are becoming more common.
Describe the importance of benefits as a part of employee compensation
What keeps these employees happy and engaged and willing to create a competitive advantage for our firm? The totality of their compensation—including their benefits packages—is one major factor. While we are all aware that most employees take a job because of the advertised level of pay, many stay with a job because of the benefits package associated with it.
Briefly discuss the question of whether incentives improve performance and some options available for incentivizing employees other than knowledge workers.
Whether incentives improve performance: if you follow the guidelines that we provided earlier, you know that we never want to incentivize only managers (we should provide incentives to all) and that. While team incentives seem to be more valuable based on the research, they are much more difficult to implement successfully in reality. There is an argument that incentive pay doesn't increase performance, but if you read the research, at least in most cases, even articles that argue against incentives note that group or team incentives tend to work. There is concern that financial incentives create pay inequality, but again, that is not necessarily a problem. Equitable rewards work better than equal rewards. Pay and incentive programs are also being used more in non-knowledge worker occupations. In every industry—from restaurants to construction and low-tech manufacturing—companies are using more comprehensive Options for incentivizing employees other than knowledge workers: pay and incentive programs to attract and keep workers in a tight labor market. These programs include everything from across-the-board pay increases to paid time off (PTO), to bonuses and changing pay policies
Discuss the strategic value of benefits programs, why these programs continue to grow, and considerations that need to be taken into account in providing benefits
benefits packages—is one major factor in keeping employees happy and engaged and willing to create a competitive advantage for our company. Today's workers demand more benefits and a better mix to fit their lifestyles. This allows companies to increase job satisfaction and engagement, because when we take care of our employees, they work harder and take better care of our customers and organization, which in turn allows us to create a competitive advantage based on our people. There are four major reasons for benefits growth: First, there are tax advantages to providing employee benefits to both employers and employees. Second, federal laws are requiring companies to provide more benefits than ever before. Third, organized labor has historically bargained for benefits for their workers, and benefits earned in these negotiations carry over to nonunion companies. Finally, buying in bulk can save significant amounts of money, so if companies buy many insurance plans, each plan costs less than if the individual bought the same insurance. The three major considerations in providing benefits are amounts, mix, and flexibility. Amount is a function of how much the company is willing to spend on its employees. Mix deals with the types of benefits that will be offered to employees. Finally, we need to consider how much flexibility we are willing to build into our benefits program, because flexible options are very important to today's employees.
Identify the 4 components of a compensation system and describe how expectancy and equity theories apply to compensation.
components of a compensation system: 1. Base pay. This is typically a flat rate, either as an hourly wage or salary. 2. Wages versus salary. Wages are paid on an hourly basis. Salary is based on time.2. Wage and salary add-ons. This includes overtime pay. 3. Incentive pay. Also called variable pay, incentive pay is pay for performance, and it commonly includes items such as piece work in production and commissioned sales. 4. Benefits. This is indirect compensation that provides something of value to the employee. expectancy theory: is a process theory of motivation. This basically means that we, as human beings, go through a cognitive process to evaluate something; and if we evaluate the process positively, we will likely continue to be motivated to do the same thing. Proposes that employees are motivated when they believe they can accomplish a task and that the rewards for doing so are worth the effort. equity theory: another concept that affects people in our organizations proposes that employees are motivated when the ratio of their perceived outcomes to inputs is at least roughly equal to that of other referent individuals. Employees are more motivated to achieve organizational objectives when they believe they are being treated fairly, especially regarding pay.
What is merit pay? What are the advantages and disadvantages of merit pay?
incentive option is called merit pay. Merit pay is a program to reward top performers with increases in their annual wage that carry over from year to year. Merit pay is different from most other individual incentives in that if an individual gets merit pay increases consistently over time, their annual pay can become significantly greater than that of others who do not consistently get merit increases. advantages: Over the employee's entire work life, this will make a huge difference in total wages earned. So HR needs to communicate the value of merit pay better than has historically been the case. Secondly, we only want to reward true top performers with merit pay. If we do so, this means that those who are rewarded are truly recognized as having exceptional ability, and it also means that limited amounts of merit pay cash can provide a larger merit increase to those who deserve it disadvantages: The first issue is that merit pay is typically a very small percentage of the individual's total pay, which makes it very difficult to use it as a motivator to perform. Another major issue is inflation of the performance appraisal process. If the company does not set limits on how many employees can be judged as outstanding or excellent, and supervisors know that a pay increase is attached to the individual's performance rating, nearly everyone tends to become outstanding or excellent. there is another problem here. Remember that merit pay increases the individual's pay from one year to the next and it carries forward, so if merit pay is 5% to 10% instead of 1% to 2%, we can end up with employees who break right through our maximum wage for a specific pay level very quickly.
What is the chief objective of most benefit plans?
our goal is to have a program that increases employee motivation and engagement and helps create a competitive advantage.
Briefly describe the concepts of job structure, pay levels, product market competition, and labor market competition.
the concepts of job structure: The job structure is what gives us our job hierarchy. The job structure is the stacking up of the jobs in the organization, from the lowest to the highest level. Each of the jobs within the job structure will end up at a particular pay level. pay levels: (frequently called a pay grade) is made up of many different jobs, and each pay level has a maximum pay rate and a minimum pay rate. product market competition: how do we determine the top of the pay level? We have to look at something called product market competition. This is a function of the value of the product or service that we sell to the customer. product market competition sets the top of the pay level for most types of jobs in the company. labor market competition: labor market competition sets the bottom of the range, and product market competition sets the top of the range. To set the minimum value for a particular pay level, we have to look at the applicable labor market competition, meaning labor supply versus demand for labor.
Briefly discuss the union certification process, the NO TIPS rules for labor elections, and the concept of collective bargaining.
the union certification process: step 1. Initial organizing activities step 2. Signing authorization cards step 3. Determining the bargaining unit step 4. Election step 5. Certification the No-TIPS rules for labor elections: NO TIPS stands for no Threats, no Interrogations, no Promises, and no Spying collective bargaining: the negotiation process resulting in a contract between union employees and management that covers employment conditions.
Discuss the primary reason why measuring job satisfaction is so difficult, identify the best tool for getting employees to tell the truth about their level of satisfaction, and list the 7 major determinants of job satisfaction.
why measuring job satisfaction is so difficult: Since job satisfaction is an attitude, we can't directly see or measure it. We have to indirectly evaluate attitudes—we have to ask people about their attitudes. This is the primary reason why job satisfaction is so difficult to measure accurately. the best tool for getting employees to tell the truth about their level of satisfaction: job satisfaction surveys that are done anonymous. major determinants of job satisfaction: personality, work itself, compensation, growth and upward mobility, coworkers, management, and communication.
