Term
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Definition
| Executive, Administrative Learned professional, Creative professional, Computer positions, Outside sales Most other jobs are nonexempt. Nonexempt jobs are subject to the FLSA overtime pay provision. |
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Term
| Individual Incentive Performance Measures |
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Definition
| Quantity of work output, Quality of work output, Monthly sales, Work safety record, Work attendance |
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Term
| Group Incentive Performance Measures |
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Definition
| Customer satisfaction, Labor cost savings, Materials cost savings, Reduction in accidents, Services cost savings |
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Term
| Company-Wide Performance Measures |
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Definition
| Company profits, Cost containment, Market share, Sales revenue |
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Term
| Management incentive plans |
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Definition
| award bonuses to managers when they meet or exceed objectives based on sales, profit, production, or other measures for their division |
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Term
| Behavior encouragement plans |
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Definition
| employees receive payments for specific behavioral accomplishments |
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Term
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Definition
| employees receive bonuses for recruitment of highly qualified employees |
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Term
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Definition
| Emphasis on teamwork, Two-tiered cost savings suggestion system, Production-level committees, Screening committees, Rewards = labor costs/SVOP |
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Term
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Definition
| Emphasizes employee involvement, Uses a value-added formula (value added/total employment costs), Value of sales price, Value of materials used, Total labor costs |
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Term
| Company-Wide Incentive Plans |
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Definition
| Rewards employees when company meets performance standards. Two Types: Profit sharing plans, Employee stock option plans |
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Term
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Definition
| Current profit-sharing plans, Financial reward for employees when company meets profit objectives |
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Term
| Deferred profit-sharing plans |
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Definition
| Right to purchase shares of company stock given to employees |
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Term
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Definition
| reward managerial, service, or professional workers for successfully learning specific curricula |
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Term
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Definition
| used mostly for employees who do physical work, increases these workers pay as they master new skills |
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Term
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Definition
| Uniquely combined characteristics of the person that enables employees to fulfill job requirements well, Core competencies are derived from companys strategic statements |
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Term
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Definition
| Works well for work teams, Service industry, Manufacturing industry, Employees, Learn functional skills, Perform managerial tasks |
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Term
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Definition
| the steps represent jobs from a particular job family that differ in terms of complexity |
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Term
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Definition
| applies to jobs within the same job family, but skills do not necessarily build on each other |
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Term
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Definition
| encourages employees to develop skills and learn to perform jobs from different job families |
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Term
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Definition
| promote staffing flexibility by training employees in one department with critical skills they would need to perform effectively in other departments |
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Term
| Compensates employees for current jobs |
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Definition
| Pay limits set for each job, Evaluations based on job descriptions and objectives. Two main types: Merit pay, Incentive pay |
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Term
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Definition
| A descriptive procedure, Identifies and defines job content |
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Term
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Definition
| Reflects value judgments, Compensation systems set pay levels |
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Term
| Job Evaluation Process Steps |
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Definition
| Select technique, Choose committee, Train members to evaluate, Document plan, Communicate with employees, Set up appeals process |
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Term
| Job Evaluation Process Steps |
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Definition
| Select technique, Choose committee, Train members to evaluate, Document plan, Communicate with employees, Set up appeals process |
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Term
| Job Evaluation Process Steps |
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Definition
| Select technique, Choose committee, Train members to evaluate, Document plan, Communicate with employees, Set up appeals process |
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Term
| Job Evaluation Process Steps |
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Definition
| Select technique, Choose committee, Train members to evaluate,Document plan, Communicate with employees, Set up appeals process |
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Term
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Definition
| entails an examination of a companys external market context and internal factors. |
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Term
| Competitors Pay Practices |
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Definition
| Base pay, Incentive awards structure, Mix and level of discretionary benefits |
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Term
| NCS Worker Characteristics |
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Definition
| Occupation, Employment status, Union status, Company size, Base pay/incentive pay, Job level |
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Term
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Definition
| Changes in pay and benefits,Data on all workers and separately, Compensation changes by categories, Are seasonally adjusted, Historical changes in labor costs, Uses fixed weights |
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Term
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Definition
| Represents the fact that a set of data center around a central point |
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Term
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Definition
| companies establish these pay structures for administrative ease |
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Term
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Definition
| executive, managerial, professional, technical, clerical, and craft represent distinct job families |
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Term
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Definition
| companies with multiple, geographically dispersed locations such as sales offices, manufacturing plants, service centers, and corporate offices |
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Term
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Definition
| is an employees nonforfeitable rights to pension benefits. Employees must be allowed to participate in pension plans after they have reached age 21 and have completed 1 year of service (based on 1,000 work hours). |
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Term
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Definition
| Guarantee retirement benefits specified in the plan document, Usually expressed in terms of a monthly sum equal to a percentage of a participants preretirement pay multiplied by the number of years he or she has worked for the employer, Benefit is fixed by a formula, Level of required employer contributions fluctuates from year to year, Level depends on the amount necessary to make certain that benefits promised will be available when participants and beneficiaries are eligible to receive them |
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Term
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Definition
| annual benefits are usually expressed as a percentage of final average wage or salary (generally based on the last three or four years of service). |
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Term
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Definition
| recognize length of service, whereby employers typically decide to contribute a specified dollar amount for each year worked by an employee. |
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Term
| Defined Contribution Plans |
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Definition
| Employers and employees make annual contributions to separate accounts established for each participating employee, based on a formula contained in the plan document., Formulas typically call for employers to contribute a given percentage of each participants compensation annually. |
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Term
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Definition
| expressed as a percentage of an employees wage or salary |
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Term
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Definition
| expressed as a percentage of the employees wage or salary |
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Term
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Definition
| from the accounts of employees who terminated their employment prior to earning vesting rights |
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Term
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Definition
| Section 401(k) Plans, Profit Sharing, Stock Bonus Plans, Employee Stock Ownership Plans (ESOPs) |
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Term
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Definition
| May be the basis for a companys 401(k) plan, Invest in company securities, making them similar to profit-sharing plans and stock bonus plans, are essentially stock bonus plans that use borrowed funds to purchase stock. |
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Term
| Hybrid PlansCash Balance Plans |
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Definition
| Combine features of traditional defined benefit and defined contribution plans, Cash Balance Plans are defined benefit plans that define benefits for each employee by reference to the amount of the employees hypothetical account balance. |
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Term
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Definition
| Organize, deliver, and finance care, Provides prepaid medical services, May include copayments, Regulated by Health Maintenance Organization Act of 1973, Prepaid group practices, Individual practice associations |
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Term
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Definition
| Select group of health care providers, Employees choose from a list, Financial incentives to use list, Physicians must, Meet quality standards, Abide by PPO cost containment, Accept PPO fee structure, Does not provide prepaid benefits |
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Term
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Definition
| Combine features of fee-for-service systems and health maintenance organizations, Employees pay a nominal co-payment for each visit to a designated network of physicians., Employees possess the option to receive care from health care providers outside the designated network of physicians, but they pay somewhat more for this choice. |
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Term
| Flexible-Spending Accounts |
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Definition
| Supplemental health coverage , Employee funds account with pretax income, Pays for qualified expenses, Unused funds forfeited |
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Term
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Definition
| Unemployment must not be workers fault, States administer within federal guidelines, States send money to federal government, Agriculture and domestic workers are exempt |
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Term
| American Recovery and Reinvestment Act of 2009 |
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Definition
| Provides a $25 weekly increase in unemployment compensation pay for eligible workers/Extends the EUC program, which was set to expire on August 27, 2009, to December 31, 2009 |
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Term
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Definition
| Old Age, Survivor, and Disability Insurance, Enacted in 1935 for retirement Survivors insurance added in 1939, Disability insurance added in 1965 |
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Term
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Definition
| For citizens age 65 and older, Provided insurance coverage for:Hospitalization, Convalescent care, Major doctor bills, Prescription drug costs |
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Term
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Definition
Region
Union status
Employment status |
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Term
Compensation Surveys
Two essential strategic considerations are: |
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Definition
Defining the relevant labor market
Choosing benchmark jobs |
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Term
NCS Average Benefit Provisions
Estimates Published by:
Broad occupational groups
Employment status
Union status
Geographic regions and industry sectors |
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Definition
Estimates Published by:
Broad occupational groups
Employment status
Union status
Geographic regions and industry sectors |
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Term
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Definition
Used for
Job evaluations
Compensation surveys
Established, well-known, stable
Common across employers
Entire range of jobs
Accepted for setting pay rates |
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Term
| Central Tendency Two Types of Measures: |
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Definition
Arithmetic mean (mean, average)
Sum of salaries/number of salaries
Represents typical market salaries
Median (midpoint)
Middle value of sequential numerical data |
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Term
Constructing a Pay Structure
Five Steps
Decide how many pay structures to construct
Determine a market pay line
Define pay grades
Calculate pay ranges
Evaluate results |
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Definition
Decide how many pay structures to construct
Determine a market pay line
Define pay grades
Calculate pay ranges
Evaluate results |
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Term
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Definition
Not subject to overtime provisions
Salaried supervisors, managers,
professionals, and executives |
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Term
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Definition
Subject to overtime provisions
Hourly, nonsupervisory |
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Term
| Commission-Plus Draw Plans |
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Definition
Draw
Advance pay for living expenses
Charged against future commissions
Recoverable or nonrecoverable
Provides strong incentive to excel |
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Term
| Salary-Plus-Commission Plans |
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Definition
Commissions based on percentage of price
Spreads risks
Designed to attract quality sellers
Allows employees to do other tasks |
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Term
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Definition
Include job descriptions
Skills needed
Training required
Accurate evaluation process
Organize jobs into family/group
List similar skills and tasks per job
Group skills into blocks |
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Term
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Definition
Job-based pay to pay-for-knowledge
Assessment of skills
Who assesses
On what
How often
Align pay with knowledge structure
Access to training
Equal access to all |
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Term
| In-House vs. Outsourced Training |
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Definition
Expertise
Needed and available
Timeliness
How soon and how often?
Number of trainees
Proprietary nature of topic
Too sensitive to share? |
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Term
Broadbanding
More latitude in pay rate decisions |
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Definition
Consolidates pay grades and ranges
Flattens corporate hierarchies
Emphasizes teamwork
Broadens job duties and responsibilities
Promotes quicker decision making
More latitude in pay rate decisions |
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Term
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Definition
New employees paid less
Temporary or permanent rewards
Mainly in unionized companies
May hinder recruiting
Can lower employees’ morale |
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Term
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Definition
Covers inpatient and outpatient
hospital care and services
Provides unlimited in-home care
Participants
Social security beneficiaries
Retirees
Voluntary enrollees
Disabled
Employer and employee financed |
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Term
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Definition
Part B Coverage
Doctors’ services
Outpatient care
Clinical laboratory services
Some preventive health services
Ambulance services |
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Term
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Definition
Supplements Parts A and B
Through private insurers
10 standardized choices
Medicare Select Option
Lower premiums for fewer choices
Not offered in all states |
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Term
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Definition
Medicare + Choice, Medicare Advantage
Established through Balanced
Budget Act of 1997
Alternative to Parts A and B
Options
Fee-for-services
Managed care plans
Medical savings accounts |
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Term
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Definition
Medicare Prescription Drug Program
Covers 75% after $250 deductible up to
$2,250
Cover 95% after $5,100 out-of-pocket
Employer subsidy for similar plan |
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Term
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Definition
State compulsory disability laws
Enacted in 1911
Employer liable regardless of fault
Maritime, federal civilian, domestic
agriculture, and small business workers
not covered |
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Term
| Workers’ Compensation Benefits |
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Definition
Medical services
Disability income
Death benefits
Rehabilitative services |
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Term
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Definition
The term key employee means an employee who at any time during the year is:
A 5% owner of the company
A 1% owner having an annual compensation of more than $160,000
An officer having an annual compensation greater than $160,000 in 2009 |
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Term
| Highly-Compensated Employee |
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Definition
The IRS defines a highly compensated employee as one of the following during the current year or preceding year
A 5% owner at any time during the year or the preceding year
For the preceding year had compensation from the employer in excess of $110,000
If the employer elects the application of this clause for a plan year, was in the top paid group of employees for the preceding year |
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Term
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Definition
Current or annual core compensation
Deferred core compensation: stock
compensation
Deferred core compensation: golden
parachutes
Enhanced protection program
Benefits and perquisites |
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Term
| How IRS defines key employees |
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Definition
A 5% owner at any time during the year or the preceding year
For the preceding year had compensation from the employer in excess of $110,000
If the employer elects the application of this clause for a plan year, was in the top paid group of employees for the preceding year |
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Term
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Definition
| —awarded on an objective basis |
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Term
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Definition
| -contingent—based on the attainment of specific performance criteria |
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Term
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Definition
| —based on a fixed formula |
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Term
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Definition
| ties bonuses to executives’ performance |
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Term
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Definition
Awarded at discounted price
Ownership of stock in 5–10 years
Must sell stock back at same price if they
leave early
Taxes paid at end of restriction period |
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Term
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Definition
Stock purchased in the future for current price
Capital gains are:
The difference between the purchase price and
the stock option price
Taxed at the time of disposition |
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Term
| Nonstatutory Stock Options |
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Definition
Company awards stock at discounted price
No favorable tax treatment
Taxes paid on difference between the
discounted price and the fair market value at
the time stock was granted |
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Term
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Definition
Awarded at discounted price
Ownership of stock in 5–10 years
Must sell stock back at same price if they
leave early
Taxes paid at end of restriction period |
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Term
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Definition
Executives awarded hypothetical stock
Executives must be employee for 5–20 years
Executives must retire from company
Capital gains paid at retirement |
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Term
| Discount Stock Option Plans |
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Definition
Options granted at rates far below fair
market value on the date it’s granted
Executive receives benefit equal to
difference between exercise price and
fair market value |
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Term
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Definition
Provides executives pay and benefits
following termination due to ownership
change
Income and benefits for 1–5 years
Not triggered by retirement, resignation,
or disability
Treated as a business expense |
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Term
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Definition
Lucrative awards that compensate departing executives with:
Severance pay
Continuation of company benefits
Stock options
Given in order to avoid legal battles or critical press reports |
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Term
| Supplemental life insurance— |
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Definition
| increases the value of executives’ estates bequeathed to designated beneficiaries (usually family members) upon their deaths, as well as provide executive with preferred tax treatments |
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Term
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Definition
| restore benefits restricted under qualified plans |
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Term
| Types of Contingent Workers |
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Definition
Part-time employees
Temporary and on-call workers
Leased employees
Independent contractors, freelancers,
consultants |
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Term
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Definition
Set weekly not daily hours
May have to work core hours
Possible employer benefits
Lower tardiness and absenteeism
Higher productivity
Extended business hours
Possible employer drawbacks
Increased overhead costs
Coordination problems |
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Term
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Definition
Employers exploit contingent workers by paying them lower wages and benefits.
Employer’s efforts to get cheap labor will lead to poorly trained and less skilled workforce that will hamper competitiveness.
Part-time employees are difficult to organize because their interests are centered on activities outside the workplace.
Part-time employment erodes labor standards: often denied fringe benefits, job security, and promotion opportunities. |
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