HRM Final Exam Review Chapters 11 12 Pay Structure Pay Level Pay Policies Compa ratio Pay Range Equity Theory and Fairness average pay including wages salaries and bonuses relative pay of jobs the range of pay often expressed by salary grades relative pay of different jobs jobs structure and how much they are paid pay level Job Structure are attached to jobs not individuals one way to examine the difference between policy and practice is to compute a compa ratio which is the ratio between actual pay and the midpoint of the pay range It is directly assessed with the degree to which actual pay is consistent with the pay policy between actual and intended pay someone else If they feel pay is equitable they are motivated links to performance appraisal ratings to annual pay increase Merit pay programs annual pay increases are usually linked to performance appraisal ratings The size and frequency of pay increases are most often determined by performance rating since better performing employees should be rewarded more than low performers and position in range compa ratio performance that does not become part of the employee s base salary programs offer a means of sharing productivity gains with employees are based on group or plant participants pay satisfactions is influenced by how they perceive they are pad relative to different employees in the same job that may have different pay rates Gain Sharing Merit Pay o Gain Sharing differs in two key respects First instead of using an organization level performance measure profits the programs measure group or plant performance which is likely to be seen as more controllable by employees Second payouts are distributed more frequently and not deferred In a sense gain sharing programs represent an effort to pull out the best features of organization oriented plans like profit sharing and individual oriented plans like merit pay and individual incentives Profit Sharing under profit sharing payments are based on a measure of organization performance profits and payments do not become a part of base pay Advantage profit sharing may encourage employees to think more like owners Disadvantage workers may perceive their performances has less to do with profit than top management decisions over which they have little control It usually is not tied to benefits such as increases is 401 k contributions Incentive Pay performance is usually measured as physical output rather than by subjective ratings Monetary incentives increased production by 30 percent in a study by Locke Individual incentives are relatively rare Although individual incentives carry potential advantages they are not likely to contribute to a flexible proactive problem solving workforce you have the potential to earn a lot of money or you could earn very little money less than paid a flat salary individual incentives reward individual performance but payments are not rolled into base pay and Pay at Risk Chapter 13 Consolidated Omnibus Budges Reconciliation Act COBRA extend health insurance coverage to permit employees to extended health insurance coverage at group rates for up to 36 months following a qualifying event such as termination The Employee Retirement Income Security Act ERISA number of years earn the right to a pension upon retirement referred to as vesting rights guarantees that employees after working a certain Requires employers to permit employees to o Obligates employers to describe the plan s funding eligibility requirements risks and so forth within 90 days after an employee has entered the plan Besides specifying termination procedures as mentioned ERISA requires certain guidelines to be met on management and funding Employers are required to fund future obligations sufficiently There are a number of reporting and disclosure requirements to the IRS to the Department of Labor and to employees Even if an employee leaves the organization before retirement the contributions are vested Vesting Paid Time Off PTO a pto pools all paid time off into one account This would include sick leave vacation holidays personal days etc employees can use up to the amount in their PTO account They do not need to Fixed pay Variable pay Benefits Total Rewards similar concept to PTO workers given a pool of benefits dollars that they can spend on how they provide excuses for sick leave Some pans allow employees to buy days Some plans allow employees to cash in unused days Some plans allow employees to give days to other employees Total Rewards Cafeteria Plans choose Some restrictions may apply mandated by the employer Offers maximum flexibility but also increases complexity Share The Risk this work you have to have healthy people The law of 80 20 key concept a large pool of insured share the costs or losses for everyone in the pool To make eight percent of all healthcare costs are caused by the 20 most ill employees Chapter 14 15 Terms Closed Shop Union Shop Agency Shop Right To Work Laws as a function of the Taft Hartley amend men to the NLRA states may decide to make is similar to a union shop but does not require union membership only that an agency fee be paid A lockout is a temporary work stoppage or denial of employment initiated by the management of a is a union security provision under which a person must be a union member requires a person to join the union within a certain length of time after beginning employment mandatory union membership or even dues paying illegal Lockout company during a labor dispute A lockout is a temporary work stoppage or denial of employment initiated by the management of a company during a labor dispute paychecks Is an automatic deduction of union dues form an employee s paycheck collective bargaining impasses by which a mediator with no formal authority acts as a facilitator and go between in the negotiations Mediation is provided by the Federal Mediation and Conciliation Service While a mediator has no formal authority to force a solution he or she acts as a facilitator for the parties trying to help find a way to resolve an impasse has no formal authority to force a solution acts as a facilitator for parties A procedure for resolving a union contract provision that requires an employer to deduct union dues from employees Check Off Provision Mediation versus Arbitration process through which a neutral party makes a final and binding decision A procedure for resolving collective bargaining impasses by which an arbitrator chooses a solution to the