MANA 3320 16th Edition Lecture 16 Outline of Last Lecture I 4 Job Evaluation Systems II Job Evaluation for Management III Wage and Salary Surveys IV Collecting Survey Data V The Wage Curve VI 3 Compensation Laws Outline of Current Lecture I 1099 Worker vs W 2 Employee II Issue of Wage Rate Compensation III 3 Economic Systems IV Types of Incentive Plans V Why Incentive Plans Fail Current Lecture 1099 Worker vs W 2 Employee o o 1099 are independent contractors or sub contractors Paid a lump sum for the job No benefits have no legal protections Pay more in taxes due to social security W 2 Paid hourly Issue of Wage rate compression o Comparable worth Under this concept three different job titles adding up to same point value should be paid the same No one uses it or follows this Not a law These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute o Living wage o Not a law Wage rate compression Compression of pay between new and experienced employees caused by the higher starting salaries of new employees Also the differential between hourly workers and their managers Occurs during labor shortages and in high inflationary times CH 10 Pay for Performance Inventive Rewards 3 economic systems o Capitalism o Socialism o Seeks to eliminate the economic extremes Communism Rewards individuals who work harder or smarter Rewards groups and penalizes those who advocate individual rewards Types of incentive plans o Individual 1 Piecework plans Straight Piecework o Differential piece rate o Have a set standard rate for units but pays more for the extra units made 2 Standard hour plan Employees receive a certain rate for each unit produced If they finish all their work early then they can go home early and get a full day s pay 3 Lump sum Bonuses plan Year end bonus usually in Dec for holidays However doesn t motivate all year long 4 Merit pay or lump sum merit pay Increase in pay due to objective performance standard used for appraisals Only motivates right after the first increased paychecks Not all employees trust merit pay due to why some people get paid more or not 5 Incentive awards o o Employee of the month parking o Trophies etc 6 Sales incentives 7 Professional employee incentive plans o Employee recognition program For non management employees has a shorter career ladder Can be for employees engineers scientists attorneys tenure in 7 or 8 year 8 Executive incentive plans Group Team compensation Scanlon plan Impro share Enterprise company wide Profit sharing Stock options Employee stock ownership plans ESOPs Why incentive plans fail o They fail to meet employee expectations for pay gains o There is confusion about incentive payment calculations due to poor design and implementation of the plan o Employees do not have the capability to change their performance levels o The organization environment does not support plan
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