12 - Managing the Compensation Process Flashcards
government _______ decisions impact compensation by affecting the supply and demand for people. legislation aimed at protecting specific groups also tends to restrict that group’s participation in the labor market. For example, compulsory schooling laws restrict the supply of children available to sell hamburgers or to assemble soccer balls. Licensing requirements for certain occupations, for example, plumbers or psychologists, restrict the number of people who can legally offer a service. in addition, immigration policy together with how rigorously it is enforced is an increasingly important factor in labor supply.
government affects demand for labor supply most directly as a major employer. in the United states, local, state and federal government units employ a substantial number of workers. A government also indirectly affects labor demand through its purchases as well as its public policy decisions.
policy
The Fair Labor Standards Act of 1938 covers all employees of companies engaged in interstate commerce or in production of goods for interstate commerce. _________ legislation is intended to provide an income oor for workers in society’s least productive jobs.
Minimum wage
generally, people under the age of ____ cannot work in hazardous jobs such as meat packing and logging. persons under the age of ___ cannot be employed in jobs involving interstate commerce except for nonhazardous work for a parent or guardian. Additional exceptions and limitations also exist. the union movement in the United states has taken a leading role in publicizing the extent of the use of child labor outside the United states to produce goods destined for the U.s. consumer
18
16
Many cities have passed their own versions of minimum wage. Sometimes the laws cover only city workers; other times they cover employers that do business with the city. Sometimes they cover only base wage, but more frequently, they are beginning to require health insurance, vacation, sick pay, job security and incentives to unionize. The aim is to increase the wage of the “working poor.” Generally, the wage that is mandated is based on some kind of assessment of living costs in an area. As a result, the amounts required vary widely. Because “______” laws are so narrowly tailored, there is some speculation that one intention of this legislation is to reduce any cost savings a municipality might receive from ______. Reduced this means more government jobs, which generally translates into more union members.
“living wage”
outsourcing
the decision of whether to classify a worker as an employee or independent contractor requires careful attention to _____ issues related to tax law and _____. small businesses as well as large corporations such as microsoft and Fedex have had to deal with stiff IRS penalties for misclassifying workers as independent contractors.
compliance
erisA
A government-defined ___________ is a minimum wage that must be paid for work done on covered government projects or purchases. The laws prevent contractors from using their size to drive down wages. Contractors must determine the “going rate” for construction in an area. As a practical matter, the “union rate” for labor becomes the “going rate.” That rate then becomes the mandated minimum wage on the government- nanced project.
Contractors object to this requirement because it frequently means they have to _______ a wage rate that only a minority of area workers receive.
Many taxpayers also object because they believe it drives up the cost of ________. A number of laws contain prevailing wage provisions.
prevailing wage
match
government
The law recognizes two types of discrimination. These are access discrimination and valuation discrimination.
Access discrimination is denying qualified _____ and _______opportunities for jobs, promotions or training opportunities.
Valuation discrimination focuses on the _____ women and minorities receive from employment. This is the issue of equal pay for equal work, as covered by the Equal Pay Act.
Some feel that the ______ discrimination also occurs when the jobs that are predominantly held by women and minorities are paid less than the jobs predominantly held by men.
women and minorities
pay
valuation
The Equal Pay Act makes it illegal to pay men and women differently for doing the same job in the organization. It requires that men and women working on substantially equal jobs receive equal pay. Equal work is defined in terms of:
(1) _____
(2) _____
(3) _____ under similar working conditions.
skill
effort
responsibility
Title VII of the Civil Rights Act prohibits _________ in any employment condition including hiring, ring, promotion, transfer, admission to training programs and compensation. It also prohibits discrimination on the basis of race, religion, color, sex, national origin and, as amended, on the basis of age, pregnancy or related conditions.
Two types of discrimination have been de ned through court interpretation. They include disparate treatment and disparate impact.
- Disparate treatment refers to treating people differently because of their _______, such as race, religion, sex, etc. The mere fact of unequal treatment may be taken as evidence of the employer’s intention to discriminate under U.S. law.
- Disparate impact discrimination involves the use of a ______ policy that has an adverse effect on women or minority employees. The case of Griggs v. Duke Power established this interpretation of discrimination. It struck down employment tests and educational requirements that screened out a higher proportion of blacks than whites. The prerequisites were applied equally to both; however, they were prohibited because (1) they had the consequence of excluding a protected group disproportionately and (2) the tests were not related to the jobs in question.
discrimination
protected status
neutral
In the case of ___________________, the Supreme Court found that charges of pay discrimination for dissimilar jobs could be based under Title VII. Prior to that ruling, lower courts only considered cases that met the equal work criteria of the Equal Pay Act.
Gunther v. County of Washington
There has been considerable research examining wage differences between men and women and various racial and ethnic groups. The issue of earnings gaps, especially any proposed remedies, continues to generate research and debate. Research appears to indicate the primary sources contributing to the gender gap differ from the primary sources for the racial/ ethnic earnings gaps. At a summary level, it appears that differences in the work/occupation (e.g., technician vs. clerical) and differences in work-related behaviors (e.g., work-life balance challenges) are central to understanding the persisting gender wage gaps. In contrast, differences in ________, especially educational levels and work-related experience as well as differences in occupations, are important sources of the gaps for both blacks and Hispanics compared to white men.
qualifications
Jobs held predominantly by women, almost without exception, are paid less than jobs held predominantly by men. Comparable worth has been debated off and on since World War ii. proponents continue to lobby for either new legislation or voluntary action on the part of employers that would include the comparable worth standard. A lot of this political activity is occurring in state and local governments. this is not surprising since over half of all women in the workforce are employed in the ________
public sector.
The four basic steps involved in establishing a comparable worth plan are:
- (1) Adopt a single “________” point job evaluation plan for all jobs within a unit. This is necessary so that similar standards will be used to evaluate dissimilar jobs.
- (2) All jobs with equal ______ results should be paid the same. If total points for jobs are the same, the jobs must be paid the same.
- (3) Identify general _______, that is, percentage male and female employees, in each job group.
- (4) The wage-to-job evaluation point ratio should be based on the wages paid for ______- dominated jobs since they are presumed to be free of discrimination. Some feel that these rates will artificially inflate all pay rates since wages cannot be lowered to make them equal.
- gender neutral
- job evaluation
- representation
- male
________ is integral to managing compensation. the cost implications of actions such as updating the pay structure, increasing merit pay or instituting gain sharing are critical for making sound decisions. Budgets account for these costs. Creating a compensation budget requires _______, such as how much of an increase should be allocated according to employee contributions versus across-the- board increases. trade-offs also occur over short- versus long-term incentives, over pay increases contingent on performance versus seniority and over cash compen- sation compared to bene ts.
Financial planning
trade-offs
There are three main factors to control in order to manage labor costs correctly. They are
- employment
- average cash compensation
- average benefit cost
