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refers to all forms of pay or rewards going to employees and arising from their employment; direct financial payments; indirect payments |
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direct financial payments |
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payments in the form of wages, salaries, incentives, commissions, and bonuses |
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payments in the form of financial benefits such as employer-paid insurance and vacations |
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contains minimum wage, maximum hours, overtime pay, equal pay, record-keeping, and child labor provisions covering the majority of U.S. workers |
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employees of one sex may be paid wages at a rate lower than that paid to employees of the opposite sex for doing roughly equivalent work |
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Title VII of the Civil Rights Act |
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makes it an unlawful practice for an employer to discriminate against any individual with respect to hiring, compensation, terms, conditions, or privileges of employment because of race, color, religion, sex or national origin |
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National Labor Relations act (NLRA) of 1935 |
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granted employees the right to organize, to bargain collectively, and to engage in concerted activities for the purpose of collective bargaining |
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pay must compare favorably with rates in other companies, or an employer will find it hard to attract and retain qualified employees |
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each employee should view his or her pay as equitable given other employees' pay in the organization |
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how employers establish pay rates |
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1.conduct a salary survey 2. employee committee determines the worth of each job 3. group similar jobs into pay grades 4. price each pay grade by using wage curves 5. develop rate ranges |
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salary (or compensation) surveys |
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formal or informal surveys of what other employers are paying for similar jobs |
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formal and systematic comparison of jobs to determine the worth of one job relative to another |
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factors that determine your definition of job content, establish how the jobs compare to each other, and set the compensation paid for each job |
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ranks each job relative to all other jobs |
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manager categorizes jobs into groups based on their similarity in terms of compensable factors such as skills and responsibility |
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involves identifying several compensable factors, each having several degrees, and then assigning points based on the number of degrees, to come up with an actual number of points for each job |
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comprises jobs of approximately equal difficulty or importance as determined by job evaluation |
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shows the average pay rates currently being paid for jobs in each pay grade; |
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4 main components of pricing managerial and professional jobs |
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base salary, short-term incentives, long-term incentives, executive benefits and perks |
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competency- skill based pay |
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employee is paid for the range, depth, and types of skills and knowledge he or she is capable of using rather than for the responsibilities of the job currently held |
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demonstrable personal characteristics such as knowledge, skills, and behaviors |
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collapsing salary grades and ranges into just a few wide levels or bands, each of which contains a relatively wide range of jobs and salary levels |
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individual incentive programs |
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give performance-based pay to individual employees who meet their individual performance standards |
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refers to group pay plans that tie payments to productivity |
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pay is tied directly to what the worker produces; system in which a person is paid a "piece rate" for each unit he or she produces |
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the right to purchase a specific number of shares of company stock at a specific price during a period of time |
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1. employer defines specific required skills 2. chooses a method for tying the person's pay to his or her skill competencies 3. training system lets employees seek and acquire skills 4. a formal competency testing system 5. designed in such a way that employees can easily move among jobs of varying skill levels |
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team or group incentive plans |
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companies often want to pay groups on an incentive basis, such as when they want to encourage teamwork; disadvantage: each worker's rewards are not based just on his/her own efforts |
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incentives for salespeople |
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most companies pay their salespeople a combination of salary and commission; typically a 70% base salary/30% incentive mix |
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nontangible and recognized-based awards |
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studies show that recognition has a positive impact on performance, either alone or in conjunction with financial rewards; employee recognition, gift certificates |
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any salary increase awarded to an employee based on his or her individual performance |
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most employees receive a share of the company's annual profits |
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employee stock ownership plan (ESOP) |
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a corporation contributes shares of its own stock - or cash to be used to purchase such stock - to a trust established to purchase shares of the firm's stock for employees |
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want to encourage improved employee productivity by sharing resulting financial gains with employees |
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(ex of gainsharing plan) 1.philosophy of cooperation 2. identity 3. competence 4. involvement system 5. sharing of benefits formula |
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earnings-at-risk pay plans |
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some portion of employees' base salary is at risk |
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defined as all the indirect monetary and nonmonetary payments an employee receives for continuing to work for the company; includes time off with pay, health insurance, and child care |
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supplemental pay benefits |
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typically one of an employer's most expensive benefits; holidays, vacations, sick leave, and jury duty |
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a one-time separation payment |
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Worker Adjustment and Retraining Act of 1989 |
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requires covered employers to give employees 60 days' written notice of plant closures or mass layoffs |
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aimed at providing sure, prompt income and medical benefits to work-related accident victims or their dependents |
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pregnancy discrimination act |
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requires employers to treat women affected by pregnancy, childbirth, or related medical conditions the same as any employee not able to work, with respect to all benefits, including sick leave and disability benefits, and health and medical insurance |
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COBRA- Comprehensive Omnibus Budget Reconciliation Act |
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requires most employers to make available to terminated employees continued health benefits for a period of time, generally 18 months |
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defined benefit pension plan |
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contains a formula for determining retirement benefits so that the actual benefits to be received are defined ahead of time |
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defined contribution plan |
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specifies what contribution the employer will make to a retirement or savings fund set up for the employee; 401k; the employees invest their own money and manage their investment |
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employee assistance programs (EAPs) |
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formal employer program for provide counseling and advisory services, such as personal legal and financial services, child care and elder-care referrals, adoption assistance, and mental health counseling |
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initially called cafeteria plans because employees could spend their benefits allowances on a choice of benefits options |
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leasing firm becomes the legal employer and handles all employee-related paperwork; also known as professional employer organizations, or human resource outsources |
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the principles of conduct governing an individual or group; standards use to decide proper conduct |
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normative judgment implies that something is good or bad, right or wrong, better or worse; involves morality, society's accepted standards of behavior; moral standards address matters of serious consequence to society's well being |
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law is not the best guide about what is ethical; something may be legal, but not right; companies where fairness and justice prevail tend to be ethical companies |
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characteristic values, traditions, and behaviors a company's employees share |
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basic belief about what is right or wrong, or about what you should or shouldn't do |
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simplest way to tune up an organization is to hire more ethical people; honesty tests; comprehensive background checks |
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showing employees how to recognize ethical dilemmas; how to use ethical frameworks (such as codes of conduct) to resolve problems; using HR functions in ethical ways |
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employees' standards should be clear; should understand the basis upon which they're going to be appraised; should be performed objectively and fairly |
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reward and disciplinary systems |
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employees expect the organization to dole out relatively harsh punishment for unethical conduct; important for the company to send the right signals by disciplining executives who misbehave |
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involving individuals in the decisions that affect them by asking for their input and allowing them to refute the merits of one anothers ideas and assumptions |
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ensuring that everyone involved and affected should understand why final decisions are made as they are and the thinking that underlies the decisions |
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making sure everyone knows up front by what standards they will be judged and the penalties |
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employee discipline and privacy |
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purpose of discipline is to encourage employees to behave sensibly at work |
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defined as adhering to rules and regulations |
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three pillars of the discipline process |
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set of clear rules and regulations, system of progressive penalties, and appeals process |
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1. Management review 2. officer complaint 3. executive appeals review |
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the complainant submits a written complaint to a member of management |
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the complainant submits a written appeal to the vice president |
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the complainant may submit a written complaint to the employee relations department |
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traditional discipline flaws |
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leaves a residue of ill will; forcing rules on employees may gain their short-term compliance, but not their cooperation |
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discipline without punishment |
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1.issue an oral reminder 2.should another incident arise within 6 weeks, issue the employee a formal written reminder 3.give a paid 1-day "decision-making leave" 4. if no further incidents occur in the next year or so, the 1-day paid suspension is purged from the person's file |
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more employers today are issuing email and online services usage policies to forewarn employees that those systems are intended to be used for business purposes only; employers may be held liable for illegal acts committed by their employees via email |
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dismissal should be fair, warranted, and just; manager should ensure that immediate dismissals are humane |
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termination at-will exceptions |
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statutory exceptions, common law exceptions, public policy exception |
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federal and state equal employment and workplace laws prohibit specific types of dismissals |
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a court may decide that an employee handbook promising termination only "for just cause" may create an exception to the at-will rule |
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courts have held a discharge to be wrongful when it was against an explicit, well-established public policy |
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unsatisfactory performance |
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persistent failure to perform assigned duties or meet prescribed standards on the job |
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deliberate and willful violation of the employer's rules |
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unsatisfactory performance, misconduct, lack of qualifications, changed requirements of the job, insubordination |
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an employee's inability to do the assigned work |
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changed requirements of the job |
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an employee's incapability of doing the work assigned, after the nature of the job has been changed |
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direct disregard of the boss's authority and disobedience of, or refusal to obey the boss's orders |
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occurs when an employee's dismissal does not comply with the law or with the contractual arrangement stated or implied by the firm via its employment application, employee manuals, or other promises |
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avoiding wrongful discharge suits |
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lay the groundwork that will help avoid such suits before they get started; use practices that help ensure the fairness of the decision |
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personal supervisory liability |
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follow company policies and procedures; do not add to the emotional hardship on the employee; let employee present his or her side of the story; do not act in anger; utilize the HR department |
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1.plan the interview carefully 2.get to the point 3.describe the situation 4.listen 5.review all elements of the severance 6.identify the next step |
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employer provides terminated employees with career planning and job search skills |
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employer sends workers home for a time for lack of work; not a permanent dismissal |
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senior management meets to make strategic decisions about the size and timing of the layoffs; front-line supervisors assess their subordinates, rating employees either A,B, or C; subordinates are informed about their A,B,C rating; employees with C grades are designated "surplus" and most likely to be laid off |
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reducing, usually dramatically, the number of people employed by the firm; requires careful planning and consideration |
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