4. Comp and Bennys 15 Flashcards
1
Q
Compensation
A
Cash based rewards provided to employees in recognition of and in exchange for the performance of their jobs.
2
Q
Benefits
A
Noncash, or indirect, rewards provided to employees in recognition of and in exchange for the performance of their jobs.
3
Q
Total Rewards
A
Speaks to HR’s responsibility to ensure that the organization’s total compensation and benefits programs, policies, and practices reinforce and support the short-term, long-term, and emerging and strategic objectives of the organization.
4
Q
Worker’s Compensation
A
State laws intended to provide medical care to injured employees and death benefits to families of those who died. Worker’s comp is a “NO FAULT” system–INJURED WORKERS RECEIVE MEDICAL OR COMPENSATION BENEFITS REGARDLESS OF WHO CAUSED THE JOB-RELATED ACCIDENT.
5
Q
Davis-Bacon Act, 1931
A
Minimum Wage! Was (and still is) limited to the construction industry– specifically, those contractors and subcontractors on:
-Any and all federal government construction contracts
-Nonfederal government construction projects in excess of $2,000 that receive federal funding.
Contractors and subs who meet either of these criteria are required to provide mechanics and labourers who are employed at the actual worksite with wages and benefits that are equal to (or better than) what workers on similar local projects receive.
6
Q
Walsh-Healy Public Contracts Act (PCA), 1936
A
Minimum Wage! Requires contractors who have contracts with the federal gov. that exceed $10,000 to pay an established min. wage to workers employed through that contract. In addition to min. wage, W-H PCA addressed issues including Overtime pay and Safe and Sanitary working conditions.
7
Q
Fair Labor Standards Act (FSLA), 1938
A
A law that establishes standard with respect to minimum wage, record-keeping, child labor standards, and overtime pay.
8
Q
FSLA- Minimum Wage
A
- It is a president who must either sign or veto legislation to increase the minimum wage.
- State -if higher (wage) super-seeds Federal.
9
Q
FSLA-Overtime
A
Non-exempt must be paid at a rate of 150% (time and a half), of his regular rate per hour. (which may be different than employee’s stated hourly wage rate) ??
10
Q
FSLA- Child labor standards (youth employment standards)
A
- Restricts number of hours under 16 CAN work as well as TYPES of work under 18 can perform.
- Children under 14 cannot be employed (except farmwork)
- 14, 15 year olds limited to: n
- non school hours, 3 hours/school day, 18 hours/school week, 8 hours in a non school day, 40 hours in a non school week, Hours btwn 7am-7pm, 9pm (june1- Labor day.
- 14, 15 year olds are restricted from performing manufacturing, mining, and hazardous jobs.
- Youths who are 16 years and older may work an unlimited number of hours per day.
- FLSA does NOT require work permits or papers, States DO!
11
Q
FSLA- Record Keeping
A
Employers must maintain accurate and complete records for each non-exempt employee of hours worked and wages earned. Certain identifying information (such at SS, address, and so on) is also required. No timekeeping required.
- Employer shall preserve for at least 3 YEARS payroll records, collective bargaining agreements, sales and purchase records, Records on which wage computations are based should be retained for 2 YEARS. e.e, time cards, piecework tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages.
- Records may be kept at place of employment or in a central records office.
- Collective Bargaining agreement may require to keep additional overtime-payments records or share them with the union at certain specified times.
12
Q
Workweek
A
Any fixed and regularly recurring period of 168 hours (24 hours in a day, seven day a week)
13
Q
Regular Rate of Pay
A
Includes more than hourly rate of pay. Also includes any incentives and commissions, but not bonuses (which unlike incentives are discretionary), pay for time not worked, premium pay for weekend or holiday work, and the like.
14
Q
Executive Exemption
A
FLSA
- Employee’s Primary duty must be Managing the enterprise or Managing a customarily recognised department or subdivisions of the department.
- The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent.
- The employee must have the Authority to Lure or Fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees must be given particular weight.
15
Q
Administrative Exemptions
A
FSLA
- Employee’s primary duty must be the performance of Office or Non-manual work directly related to the management or general business operations of the employer or the employer’s customers.
- The employee’s primary duty includes the Exercise of Discretion and Independent judgment with respect to matters of significance.
16
Q
Computer Employee Exemptions
A
FSLA
- Employee rate must not be less than $455 per week or not less than $27.63
- Employed as Computer Systems analyst, programmer, software engineer, simliarly skilled in the field perfomring these duties:
- Fill in more here
17
Q
Outside Sales Exemption
A
FSLA
Minimum salary is not required to establish an exemption on the basis of outside sales.
-Primary duty must be Making Sales (as defined by FLSA) or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer.
-Must be Customarily and Regularly engage Away from the employer’s place or places of business.
18
Q
Highly Compensated Employee Exemption
A
FLSA. Employee must:
- Earn $100,000 or more annually (of which at least $455 per week must be paid on a salary or fee basis.
- Perform Office or Nonmanual work.
- Customarily and regularly perform at least One of the duties of an Exempt executive, administrative, or professional employee identified in the Standard Tests for exemption.
19
Q
Safe Harbour Provisions
A
Provision under which an employer that has made IMPROPER SALARY DEDUCTIONS can protect itself from losing the exemption. To do so, required to:
- Have a clearly COMMUNICATED POLICY prohibiting improper deductions and including a compliant mechanism.
- REIMBURSE employees for any improper deductions.
- Make a good faith commitment to comply in the future.
20
Q
Portal to Portal Act, 1947
A
An amendment to the FSLA.
that offered clearer def of “hours worked” for the purpose of minimum wage and overtime payments.
-Employers only required to compensate workers for working time that they spend on ACTIVITIES THAT RELATE TO THE PERFORMANCE of their job.
21
Q
Equal Pay Act (EPA), 1963
A
Law that prohibits discrimination on the basis of sex in the payment of wages or benefits to men and women who perform substantially equal (but not identical) work, for the same employer , in the same establishment, and under similar working conditions. (Establishment usually refers to one specific physical location.) Four factors are used as bases to assess the substantial equality of jobs under the EPA:
- RESPONSIBILITY: The degree of responsibility and accountability that an employer entrusts to and expects from a particular position.
- SKILL: The amount or defree of experience, ability, education, and training required to perfom the job.
- WORKING CONDITIONS: The physical surrounding of the position, as well any hazards that are associated with a particular position.
- EFFORT: The amount of physical or mental exertion required to perform the job.
22
Q
Social Security Act (SSA), 1935
A
A social insurance program that is FUNDED THROUGH PAYROLL TAXES. Social Security has three primary components, which are now referred to as Retirement income, Disability benefits, and Survivors benefits.
23
Q
Unemployment Insurance
A
A program intended to help employees financially “bridge” the gap between positions when an employee has lost his job through no fault of his own. Unemployment insurance was established as part of the federal Social Security Act of 1935 but is administered at the state level. Unemployment insurance is funded through employer taxes (except in three states, where employees contribute as well).
24
Q
Medicare, 1965
A
An amendment to the Social Security Act that provides Hospital and Medical insurance for the elderly and people with disabilities. Four Parts: Hospital (A), Medical (B), Medical Advantage Plans (C), Prescription (D).
25
Medicare, Plan A
Helps pay for Inpatient Hospital care, Skilled Nursing care, and other services
26
Medicare, Plan B
Helps pay for items such as Doctor's fees, Outpatient Hospital visits, and other medical services and supplies.
27
Medicare, Plan C
Portion that is available to persons who are eligible for Part A and enrolled in Part B through which private health insurance companies can contract with the federal gov. to offer Medicare benefits through their own policies.
28
Medicare, Plan D
Portion of Medicare that added prescription drug benefits for all individuals eligible for Medicare Part A and enrolled in Medicare Part B.
29
Employee Retirement Income Security Act (ERISA), 1974
A law that was established to protect the interests of those who participate, and the beneficiaries of those who participate, in employee benefit plans. ERISA applies only to programs established by private industry employers, ERISA establishes minimum participation and vesting standards for retirement programs and minimum standards for welfare benefits (including health) plans.
30
Immediate Vesting
-An employee is immediately and fully vested in the employer match as soon as it is processed to her account.
Vesting: Process by which an employee earns a nonforfeitable right to the employer's contribution of her defined benefit/ defined contribution plan.
Immediate Vesting:
31
Graded Vesting
A vesting arrangement in which an employee earns a nonforfeitable right to an increasing percentage of her employer's contributions over a period of years (no more than 6 years for full vesting.)
32
Cliff Vesting
A vesting arrangement in which an employee earns a nonforfeitable right to 100% of his employer's contributions after a specified number of years (no more than three) but forfeits all rights to those contributions if his employment is terminated before he vests.
33
Pension Benefit Guaranty Corporation (PBGC)
A government corporation created by ERISA that functions as an insurer that provides a minimum guaranteed benefit for certain pension plans. PBGC protects participants in most defined benefit plans and cash balance plans (within certain limitations). PBGC is funded by insurance premiums that are paid by plan sponsors, not by general tax dollars. Funding also comes from investment income, assets from underfunded pension plans it has taken over, and recoveries
from companies formerly responsible for those plans.
34
Summary Plan Description
A document that employees (or beneficiaries) who become participants in a retirement plan that is covered under ERISA are entitled to receive, at no cost, from the plan administrator. The SPD describes what the plan provides and how it operates. It also provides information relative to when an employee can begin to participate in the plan, how service and benefits are calculated, when benefits become vested, when and in what form benefits are paid, and how to file a claim for benefits.
35
Revenue Act, 1978
Among many other changes, the Revenue Act added two sections to the tax code that essentially resulted in the creation of two new and ultimately very important employee benefits: Section 125 plans and 401k.
36
Cafeteria Plans
Three types: PoP, FSA, Full Cafeteria plans.
37
Premium Only Plans
With POP's the simplest and most transparent (from employee perspective) of the three section 125 plans, employees pay for their portion of certain insurance premiums (health, dental, and so on) on pretax basis. The net effect is that each employee's taxable income is reduced, which is how employers and employees can reduce taxes- and save money.
38
Flexible Spending Accounts
FSA's take POP's one step further. With FSA's employees can set aside pretax dollars to pay for medical expenses that are not covered by insurance. FSA's can also be set up for dependent care. Employees decide how much money to set aside for the following year, and that amount is automatically deducted from the employee's pay on a pretax basis. After incurring and paying for eligible expenses, employees apply for reimbursement from the FSA.
39
Full Cafeteria Plan
Employees who offer full cafeteria plans provide their employees with specific amount of money they can use to pick and choose from a variety of benefits. (Although they offer distinct advantages, especially for employees, full plans are the most administratively burdensome of the 3 Section 125 options.
40
Section 125 Plans
Tax Code created by the Revenue Act of 1978 that created flexible benefits plans (often referred to as Cafeteria Plans). Can help employers as well as employees save money by reducing payroll taxes.
41
Retirement Equity Act (REA), 1984
An Amendment to Employee Retirement Income Security Act (ERISA) that incorporated a number of key revisions, many of which addressed the concerns of former (in the event of divorce) and surviving (in the event of death) spouse.
42
Consolidated Omnibus Budget Reconciliation ACT (COBRA), 1985
An Amendment to Title 1 of ERISA that requires employers who employed 20 or more people during the prior year to offer continuation fo group health care coverage to employees and their family members who experience certain qualifying events- events that would have otherwise resulted in the discontinuation of their health insurance benefits. COBRA places certain requirements on plan participants who want to extend coverage and places certain requirements on the plan provider, in particular with respect to notification requirements.
43
COBRA Qualifying Event
Events that would have otherwise resulted in the discontinuation of health insurance benefits for employees, their spouses, and dependent children.
44
Older Worker's Benefit Protection Act (OWBPA), 1990
An amendment to the Age Discrimination in Employment Act (ADEA) that makes it illegal to discriminate against older workers with respect to benefits or to target older workers for layoffs.
45
Health Insurance Portability and Accountability ACT (HIPAA), 1996
An amendment to ERISA 2 Focuses: Security and portability of health care coverage, and privacy considerations.
-Intended to help workers experience greater security and portability with respect to health care coverage, even when an employee changes jobs. HIPAA also afforded significantly greater protections for employees who have or who have a family member with a preexisting medical condition.
46
HIPAA Privacy Rule
Designed to protect patients and other consumers of health care services from the unauthorised disclosure of any personally identifiable health information (protected health information, or PHI). Health information is considered to be personally identifiable if it relates to a specifically identifiable individual.
47
Family and Medical Leave Act (FMLA), 1993
FMLA entitles eligible employees (who work for covered employers) up to 12 weeks of unpaid, job protected leave during any 12-month period for one or more of the following reasons:
- The birth and care of the newborn child of the employee.
- Placement with the employee of a son or daughter for adoption or foster care.
- Care for an immediate family member(Spouse, child, parent) with a serious health condition.
- Medical leave when an employee is unable to work because of serious health condition.
48
Serious Health Condition
Means illness, injury, impairment, or physical or mental condition that involves:
- Always consult with legal counsel
- Employer's can/will provide employees who notify them of their need for FMLA because of heir own serious health condition with a "Certification of Health Care Provider for Employee's Serious Health Condition" or the equivalent thereof:
49
Serious Health Condition means an illness, injury, impairment, or physical or mental condition that involves
- Any period or incapacity or treatment connected with inpatient care (I.e. overnight stay) in a hospital, hospice, or residential medical care facility: OR
- A period of incapacity requiring absence of more than three calendar days from work, school, or other regular daily activities that also involves continuing treatment by (or under supervision of) a health care provider. OR
- Any period of incapacity due to pregnancy, or for prenatal care; OR
- Any period of incapacity that is permanent or long-term due to a condition for which treatment may not be effective (e.g. Alzheimer's, stroke, terminal diseases, etc.) OR
- Any absence to receive multiple treatments (including any period of recovery there from) by, or on referral by, a health care provider for a condition that likely would result in incapacity of more than three consecutive days if left untreated (e.g. chemo, physical therapy, dialyses, etc.)
50
Uniformed Service Employment and Reemployment Rights Act (USERRA), 1994
A law that provides reinforcement rights for individuals who miss work because of "service in the uniformed services," which is defined as voluntary or involuntary uniformed service.
51
Mental Health Parity Act (MHPA), 1996
A law that prohibits group health plans providers, insurance companies, and health maintenance orgs. (HMO's) that offer mental health benefits from setting animal or lifetime dollar limits on mental health benefits that are lower than any such dollar limits for medical and surgical benefits.
52
Sarbanes-Oxley Act (SOX), 2002
A law designed to protect investors, SOX enacted reforms designed to enhance corporate responsibility and financial disclosures and to combat corporate and accounting fraud.
53
Pensions Protection Act (PPA), 2006
A law that brought about "significant changes to section 101 (f) of ERISA by enhancing the content of the notice and extending the requirements to provide notice to single-employer plans.
54
Family and Medical Leave Act and National Defense Authorisation Act for FY 2008, 2008
FMLA amendment adding "Qualifying Exigency leave" and "Military caregiver leave."
55
Patient Protection and Affordable Care Act (PPACA), 2010
The ACA, also sometimes known as Obama Care requires all Americans to secure healthcare coverage and expands coverage limits (financial and non-financial)
56
Independent Contractor
An individual who has been retained by an organisation to perform work for that organisation and who is not compensated directly on that employer's payroll system.
57
Independent Contractor: Behavioural Control
Who controls and directs how the work is done? For example; it could be argued that the business maintains behavioural control if it provides the individual with training, instructions, and so forth.
58
Independent Contractor:
| Financial Control
Does the business have a right to control th financial and business aspects of the worker's job?
- To what extent does the worker have unreimbursed business expenses?
- What is the extent of the worker's investment in the facilities used in performing services?
- To what extent does the worker make her services available to the relevant market?
- How does the business pay the worker?
- To what extent can the worker realize a profit or incur a loss?
59
Independent Contractor
| Type of Relationship
Is there a written contract in place? If so, to what extent does it describe
- The relationship the parties intended to create?
- The extent to which the worker is available to perform services for other, similar businesses?
- Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay?
- The permanency of the relationship?
- The extent to which services performed by the worker are a key aspect of the regular business of the company
60
Pay structures
The "building blocks" that are used to create compensation systems that will support the total compensation philosophy of the organisation, and that will, in turn, support the attainment of the organisation's objectives.
61
Grades/ Job Grades
"Levels" into which jobs of similar internal worth can be categorised. Jobs within the same grade share a similar level of value or worth to the organisation. Different organisations will have different numbers of pay grades, with differing degrees of distinction between each of those grades.
62
Ranges/ Pay Ranges
A range of compensation rates that correspond to grades and that guide the pay rates for jobs within that grade. Ranges specify the lowest (min) and the highest (max) compensation rates for which positions within each grade are generally paid. The halfway point between those two figures is known as the midpoint.
63
Range Spread
Max- Min / Min: The percentage that is calculated by subtracting the minimum of the range from the maximum of the range and dividing that number by the minimum of the range. Range spreads allow organisations to recognise and compensate employees within the same job and within jobs that are in the same grade, for different levels of skill, experience, or performance.
64
Broad-banding
An approach to pay systems that includes a relatively small number of grades. Organizations might choose to use broadbands to bring about a cultural change (For instance, to support the implementation of a flatter organisation) or to shift employees' focus away from traditional promotions and place it instead on professional growth and development. Broadbands typically have range spreads of 100% or more.
65
Compa-ratio
The compa-ratio for each employee is calculated by DIVIDING THE EMPLOYEES PAY RATE BY THE RANGE MIDPOINT for his position. Compa-ratios can be particularly valuable measure for organisations that seek to match the market because, in such systems, midpoints are often considered to be a CLOSE APPROXIMATION of the MARKET RATE for a position.
By calculating the compa-ratio, therefore, you can compare the employee's rate of pay with market rate for his position.
66
Lead the Market
A compensation approach in which an organisation offers total compensation packages that are "better" than packages being offered by their labor market competitors. Organisations that lead the market may believe that higher compensation packages will attract higher-performing employees who will, in turn, pay for themselves and then some. In short, these organisations want the best of the best and are willing to pay for it.
67
Lag the Market
A compensation approach in which an organisation chooses, by design, or simply because of budgetary constraints, to offer total compensation packages that are less competitive than the total compensation packages that are being offered by their labor market competitors.
68
Match the Market
A compensation approach in which an organisation chooses to offer total compensation packages that are comparable to the total compensation packages being offered by their labor market competitors. Organizations that match the market make a conscious choice to be "externally competitive" with respect to total compensation.
69
Direct Compensation
Components of total compensation that are presented to employees in the form of cash.
70
Commissions
compensation paid to employees for the execution of specific transactions or sales
71
Hourly Wages
The hourly pay that an employee earns for performing her job, regardless of level of performance demonstrated.
72
Salary
A predetermined amount of compensation that an employee will be paid per week.
73
Shift Differentials
Additional hourly compensation that is paid to employees whose shift start, end, or are scheduled during specified hours. Shift differentials do not exist in all organizations. They represent a way to attract and retain individuals to work shifts that are perceived as less attractive to current or potential employees.
74
Sign-on bonuses
Money paid to an employee when she joins the organization
75
Variable Pay
Also known as "at risk" pay, variable pay is cash compensation that fluctuates and is tied, in some way, to the employer's performance. It is not guaranteed and is generally tied to the achievement of specific objectives. Variable pay can also take the form of "bonuses." While the terms "bonus" and "incentive" are often used interchangeably, incentives are tied to the specific achievement of individual, group, or organizational goals, whereas bonuses are more discretionary in nature.
76
Indirect Compensation
Components of total compensation that are presented to employees in forms other than sash. This could include, but is not necessarily limited to
-Legally mandated benefits such as S.S., Medical insurance, Dental, Long term dis, Vacation time, holiday time, Recognition programs (such as peer recognition programs, non-cash spot awards, achievement awards, Perquisites (also known as "perks" such as a company car, club memberships, financial planning, legal services, and so on.)
77
Compression
Occurs when employees' pay is clustered so closely together that it does not reflect differences in performance, contribution levels, or seniority. Compression can occur for a variety of reasons, including but not limited to increase in the minimum wage or failure to maintain internal equity while monitoring concerns related to external equity.
78
Internal Equity
The degree to which employees within the org are fairly compensated with respect to how other employees within the same organization are compensated.
79
Geographic Pay Differential
Monetary adjustments made to pay/ pay structures as a way of adjusting for different cost of living levels in different locations.
80
Piece Rate System
Compensation programs under which individuals are paid according to their production volume.
81
Employee Stock Ownership Plan (ESOP)
Type of defined contribution plan in which investments to individual accounts are made primarily in the form of employer stock. ESOP's offer certain tax advantages to employers as well as to employees.
82
Profit Sharing Plan
A type of defined contribution plan under which the organisation contributes to its employees' accounts. These contributions often come from profits and thus serve as an incentive to performance.
83
Simplified employee pension plan (SEP)
A defined contribution plan that allows employers to contribute on a tax-favored basis to individual retirement accounts (IRAs) that employees set up for this purpose.
84
Health and Welfare Benefits
A variety of non-retirement, non-mandatory benefits that can be effective ways of attracting, motivating, and retaining employees.
85
Indemnity Insurance
The most traditional type of medical insurance plan. Indemnity plans provide participants with (virtually) unrestricted choices relative to their doctors, hospitals, and other health care providers. Health care providers are paid a fee for the services they actually provide and perform.
86
Health Maintenance Organisation (HMO)
A managed care model of health care and health insurance. In an HMO, each participant chooses a primary care physician, or PCP, who serves as a gatekeeper. Participants must see their PCP's first, and the PCP then decides whether to refer the patient to a specialist or for additional tests.
87
Preferred Provider organisations (PPO's)
A managed care health care plan that offers a network of health care providers who band together to offer services at a discounted rate to plan participants. PPO's resemble indemnity plans, in that network providers are paid when they render services and plan participants can choose which doctors they want to visit and when they want to visit them. Plan participants can also choose to avail themselves of doctors or other health care providers who are outside the network; however; the costs to the member will be higher than they would have been if the member had chosen a doctor within the network.
88
Point of Service
A type of managed health care plan that is a combination of the health maintenance organization (HMO) and the preferred provider org (PPO) managed care models. Like a PPO model, there is a network of physicians and health care providers who have agreed to provide services at a discounted rate. Like the HMO model, there is a gatekeeper, a primary care physician who must provide plan members with referrals to specialists and for other services. Unlike the HMO model, however, referrals can be made to physicians who are either inside or outside the network. Although out of network referrals will cost participants more, they are permissible.
89
Dental Plan
can be offered through an indemnity program, an HMO network, or a PPO network. There are also some specific. categories of coverage within dental plans, each of which is likely to offer a different level of reimbursement.
90
Preventative Care
Includes such things as regular dental checkups, exams, cleanings, and sometimes X-rays. it is often reimbursed at 100% of cost (or at 100% of reasonable and customary (RnC) expenses. to encourage plan members to take advantage of measures that encourage good oral health and that potentially decrease long-term costs.
91
Restorative Care
Oral "repairs" that are usually of relatively minor nature, such as Cavities or Root canals The reimbursement for restorative care is general less than the reimbursement rate for preventive care (perhaps 80% instead of 100%).
92
Major Restorative Care
Minor and major are used to determine the degree of restorative care that is required. Major is usually reimbursed at an even lower rate (Perhaps 50%). I.e. Bridgework, Crowns
93
Orthodonture
Braces, headgear, retainers, and the like. is a benefit that is often reimbursed at 50%. Unlike the other types of dental insurance discussed previously, orthodonture is often subject to a lifetime cap- perhaps in the vicinity of $1,000 - $5,000.
94
Vision Coverage
An employer will typically offer vision coverage as a discount program (generally around 10%) vision coverage generally includes items such as exams, contact lenses, and glasses.
95
Prescription Drug Coverage
Some employers provide prescription drug coverage as part of their medical plan, whereas others provide this coverage under a separate plan. Plan members may be required to pay a copay, to purchase their prescriptions at certain pharmacies, to use generic drugs (when available)
or to use mail-order services for maintenance drugs (prescriptions that are prescribed for chronic or longer-term conditions and that are taken on a regular, recurring basis). Even with these restrictions, prescription drug coverage can be a huge benefit to employees.
96
Life Insurance
Term Life insurance is also considered to be a valuable benefit by many employees as a way of ensuring that they can provide their beneficiaries and loved ones with income in the event of their deaths. Many employers offer a certain amount of life insurance at no cost to employees and offer optional supplemental life insurance as well.
97
Long term disability insurance
LTD insurance replaces a designated percentage of an employee's income that is lost through illness or injury.
98
Pay for time not worked
Refers to situations in which employees receive compensation for sick day, vacation days, jury duty, personal time, designated holidays, floating holidays, bereavement leave, and the like.
-"Free time" for employees, however, isn't free of charge to the organization. From the organizations perspective, the true cost of pay for time not worked needs to be calculated just like any other benefit. ??
99
Work-life programs
Programs such as flexible schedules, job sharing, telecommuting, and compressed work weeks can be a great advantage for employees and a great way for employers to market themselves in a relevant labor market.
- Conduct careful analysis and assessment (ADDIE).
- should be sustainable for the foreseeable future
- no advisable to implement a program that might need to be revoked in the near time.
100
Employee Assistance program
EAP's. offer emplyees help and resources on a variety of personal issues than, and often do, have a direct impact on employee job performance. EAP, which are paid for by the employer, benefit employers as well as employees.
-Important to know how to calculate the cost of EAP's when proposing changes or expansion to senior leadership. Ultimately, EAP's can offer a positive ROI.
101
Job Evaluation
Process through which every job in an organization is assessed and compare to other jobs in the org. At the conclusion of the job evaluation process, you will be able to ascertain the relative worth of each job within the org.
- At the end you will have a Overall Job-worth hierarchy.
- Job evaluation techniques fall into two categories (nonquanitative and quantitative)
102
Non quantitative Job evaluation techniques
determine the relative value of jobs within the organisation without using mathematical techniques. These methods focus on the whole job which in why the are referred to as "Whole Job methods"
103
Whole job methods
Nonquantitative job evaluation techniques that determine the relative value of jobs within the organisation without using mathematical techniques.
104
Whole Job ranking
A whole job evaluation technique that ranks, from lowest to highest, according to the importance that each job holds (or, stated differently, the value that each job brings) to the organization. In essence, a whole job ranking is a list that reflects which jobs are more important to the organization and which jobs are least important to the organization, in rank order.
105
Job Classification
A non quantitative, whole job evaluation technique that categorizes jobs into broad categories, or "levels," based on the level- and ultimately, value to the organization--of the work that is performed by jobs within each job level. Each level incorporates specific responsibilities and benchmark statements that describer the nature, complexity, autonomy, and so on of the work that is performed by positions in that level.
106
Job Slotting
A nonquantitative, whole job evaluation technique that incorporates or "slots" newly created or revised positions into an existing job hierarchy. This process of slotting is accomplished by comparing the new or revised job descriptions to job descriptions of positions that have already been evaluated and assigned within the hierarchy.
107
Quantitative job evaluation techniques
Job evaluation techniques that determine the relative value of jobs within the organization without using mathematical techniques. Quantitative (or factor-based) job evaluation methods identify the degree to which each position is responsible for or requires specific "compensable factors
108
Point factor
A quantitative job evaluation system that first identifies specific compensable factors and then establishes levels of performance within each of those compensable factors. The relative importance of each compensable factor to the organization is "weighted," and a different point value is then assigned to each level within each compensable factor.
109
Factor Comparison
A quantitative job evaluation system that involves the ranking of each compensable factor of each job. A monetary value for each level with each factor is subsequently identified. Similar to the point factor method, each job is evaluated with respect to each compensable factor, and the appropriate level (with an accompanying dollar value) is selected.
110
Market pricing
A process of looking at the relevant labor market to ascertain what the going rate or market rate is for a particular position. Market pricing can yield valuable pay data about "benchmark" jobs -jobs for which close matches can be identified in the relevant labor market.
111
Relevant labor market
The size and scope of the geographic area within which an organisation would seek to attract qualified candidates for a particular position (s). Even within the same organiztions, the relevant labor market for different positions can vary widely depending upon the skills, knowledge, abilities , and behavioural characteristics required to perform each position successfully. Other factors that impact how an organization defines the relevant labor market might be the degree of competition that exists among employers for particular skills or knowledge and the degree to which certain skills or knowledge requirements are industry specific.
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Labor Market Competitors
other employers with whom you are competing for talent.
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Aging
The process of mathematically adjusting market data collected during the market pricing process to a common date (usually the date on which the market analysis is being conducted.)
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External Equity
The degree to which employees within an organization are fairly compensated with respect to how employees outside of the organization, but within the relevant labor market, are compensated.
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Base Pay
The fixed rate of pay that an employee receives for performing his job. Bas pay does not include earning obtained through shift differentials, benefits, overtime, incentive premiums, or any pay element other than the employee's fixed rate of pay.
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Merit Pay
Increases to earnings that are given to employees on the basis of performance during a specified period of time (such as a performance measurements period) that is ideally aligned with the performance appraisal systems.
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Variable Pay
Also known as "at risk" pay, variable pay is cash compensation that fluctuates and is tied, in some way, to the employee's performance. It is not guaranteed and is generally tied to the achievement of specific objectives. Variable pay can also take the form of "bonuses" while the terms "bonus" and "incentive" are often used interchangeably, incentives are tied to the Specific Achievement of individual, group, or organizational goals, whereas bonuses are more discretionary in nature.
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Incentive Plans
Variable compensation plans that establish specific financial and non-financial goals and targets for individuals, groups, and organizations. For incentive programs to be effective, employees need to believe that they can attain the goals that have been set as part of the incentive program and that the reward that they would earn by attaining those goals is sufficiently worthwhile.
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Short term incentives
Incentive programs that are usually one year or less in duration
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Individual (Short term incentives)
Used to financially motivate individual employees to attain specific financial or non-financial objectives.
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Team Group (Short term Incentives)
Targets are set for groups of people instead of for individual employees. These incentive programs are intended to foster collaborative efforts and synergies among employees who are pursing a common goal.
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Long term incentive programs
Similar to short-term individual incentive programs except that they are usually more than on year in duration.
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Gainsharing
Incentive plans that are designed to motivate employees to reach specific goals relating to cost cutting or revenue generation and that share a portion of that savings (or that increased revenue) with the employees who helped to achieve it. Gainsharing plans are based on team/group performance, not individual performance.
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Profit Sharing
Organization wide incentives plans that establish an organization wide profit goal. If the goal is reached, the profits are shared with employees. Profits can be shared either immediately (cash-profit-sharing plans) or later (deferred profit-sharing plans)
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Non-cash compensation
- gift cards, travel certificates, etc. (might be subject to income taxes)-Consult with counsel.
- property, equity,
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Equity compensation
- is a non-cash compensation that represents a form of ownership interest in a company. Due to the complexity of implementing an equity compensation program, companies must plan and use proper legal, accounting, and tax advice and planning.
- Companies that offer equity compensations give employees stock options with the right to purchase shares of the companies' stocks at a predetermined price, also referred to as exercise price. This right "vests with time, so employees gain control of this option after working for the company for a certain period of time. When the option vests, they gain the right to sell or transfer the option. This method encourages employees to stick with the company for a long term.
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Property compensation
is another form of non-cash compensation. used cars may be given to employees.
-Must be declared as earnings on the employees W2
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Fiduciary responsibility
Fiduciaries are charged with running the plan (s) for which they are responsible solely in the interest of participants and beneficiaries. They must ensure that the sole purpose of the plan is and remains providing benefits to participants and beneficiaries and paying plan expenses. Fiduciaries must alos act with skill, care, prudence, and diligence. For instance, they must protect plan participants by diversifying plan investments and must follow the terms of plan documents to the the extent that those terms are consistent with Employee Retirement Income Security Act (ERISA). They also must avoid conflicts of interest, and, many would argue, even the possibility of an appearance of a conflict of interest (the same standard to which HR professionals should hold themselves.
