Missing NOE 3 Chapter 12 NOE EMPLOYEE PARTICIPATION AND COMMUNICATION ARE VITAL Incentive Pay Pay related and based on performance organizations have a wide variety of options when it comes to incentive pay Incentive pay plans must be well designed and contribute to the organizations success It must be linked to the orgs goals reachable the org must provide the resources to reach the goals the employees must value the rewards it must be fair and the plan must take into account that employees may ignore goals that are not rewarded Pay For Individual Performance 1 Piecework Rates Wage based on the amount they produce straight sane pay for every unit Differential ex 1 for every unit produced if you make over 12 units 80 cents for every unit you make if it is under 12 2 Standard Hour Plans Example If a mechanic completes a job in hour that has a set standard time if 1 hour he will receive full pay for that job Incentivizes to work harder and faster 3 Merit Pay a system if linking pay increases to ratings on performance appraisals Problems include bias and working solely towards the benefit of the individual 4 Individual bonuses based on merit as well not rolled into base pay 5 Sales Commissions makes a percentage of each sale Pay for Group Performances Gain sharing measures increases in productivity and effectiveness and distributes a portion of each gain to employees Most likely to succeed when the org provides the right conditions Common form of gain sharing is the Scanlon Plan which is a gainsharing program where the employees receive a bonus if the ratio of labor costs to the sales value od productuction is below a set standard Group Bonuses and Team Awards Tend to be for smaller groups unlike gain sharing and reward the group for attaining a specific goal typical measured in physical output Two Key ways orgs measure performance Profit and Stock Price Pay for organizational performance Profit Sharing payments are a percentage of the orgs profits and do not become part of the employees base salary Used for a number of reasons forces employees to think like owners costs less during financial difficulties Stock Ownership Stock Options the right to buy a certain number of shares of stock at a certain price when purchasing it you are exercising that option Typically used for upper management Employee Stock Ownership Plans ESOP used for a broader arrangement of employees the org distributes shares of stock to its employees by placing the stock into a trust managed on the employees behalf and receive regular updates They can sell the stock back to the company or on the open market if its public when they leave Balanced Scorecard Not a single form of these pay incentives will work a combination of short term and long term incentives must be used to create a fair and balances structure that suits your company and employees Incentives for executives Stock options bonuses profit shares things that are company wide since they have a larger influence Ethical issues Recent News Occupy Wall Street etc NOE Chapter 13 Providing Employee Benefits Employee Benefits compensation other than cash Benefits contribute to attracting retaining and motivating employees Benefits Require by Law Social Security Unemployment Insurance a federally mandated program to minimize the hardships of unemployment through payments to unemployed workers help in finding new jobs and incentives to stabilize employment Experience Rating the amount of tax imposed on each employer based the number of employees the company laid off in the past and the cost of providing them with unemployment benefits and employers with a history of large layoffs have higher taxes then those with fewer Workers Compensation State programs which helps workers with the expense resulted from job related illnesses and accidents 4 Categories Disability medical care death benefits rehabilitative services Unpaid Family and Med Leave FMLA org with 50 or more employees must provide up 12 weeks unpaid leave Patient Protection and Affordable Care Act Health care reform aw that includes incentives and penalties for employers providing health insurance as a benefit Optional Benefits Programs Paid Leave vacation sick days holidays an employer determines these policies Floating holidays are paid holidays that vey from year to year Group Medical Insurance Consolidated Omnibus Budget Reconciliation Act COBRA federal law that requires employers to permit employees or their dependents to extend health coverage at group rates for up to 36 months following a layoff reduction in hours or sudden death Health Mantinence Organization a health care plan that requires patients to receive their medical care from the HMO s professionals who are often paid a flat salary and provide all services on a prepaid basis Preferred Provider Organization a healthcare plan that contracts with health care professionals to provide services at a reduced fee and gives patients financial incentives to use network providers Flexible Spending account employee controlled pretax earning set aside for certain eligible expenses such as healthcare expenses during the same year Employee Wellness Program a set of communications activities and facilities designed to change health related behaviorism in ways to reduce risk Short Term Disability Less Then 6 months pays a portion of their salary Long Term Disability insurance that pays a portion of their salary after an initial period and potentially for the rest of their life Retirement Plans Contributory funded by contribution from the employee and employer Noncontributory funded by employer Defined Benefit Plan Pension plan that guarantees a speciefid level of retirement income Employee Retirement Income Security Act law that increased the responsibility of pension plan trustees to protect retirees and established rights about vesting and portability also created the Pension Benefit Guarantee Corporation Defined Contribution 401k s etc Cash Balance Plan Retirement Plan in which the employer sets up an individual account for each employee and contributes a percentage of the employees salary and earns a predefined interest rate Vesting Rights Guarantee that when employees become participants in a pension plan and work a specified number of years they will receive a pension at retirement age regardless weather they stay4ed with the employer Summary Description pan describes a pensions plans funding requirements etc Cafeteria style plans benefits plan
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