chapter 2 HR contextual influences on compensation practice Flashcards
What are the four factors
- industry
2.occupation
3.geography
4.unions
How does the industry product market affect wages ?
where there is little competition there is greater flexibility for providing higher wages
How does capital intensity affect wage difference ?
The extent to which companies’
operations are based on the use of large-scale
equipment, and capital intensity is associated with
higher wages
How does industry profitability affect wage difference?
Presumably, employee higher
levels of knowledge, skills and abilities contribute to
company profitability, which, in turn, is associated with
higher wages
How does unionization affect wage difference ?
More highly unionized
industries pay more highly, in part, because the
collective bargaining process gives labor greater
leverage for negotiating higher wages and benefits
What factors lead to interindustry wage differences
- industry product market
2.capital intensity
3.industry profitability - unionization of the workplace
Occupation
a group of jobs, found at more than one company, characterized by a:
* Common set of tasks, and related
* Not a single job but a group of jobs that work together for example clerk one, clerk two, clerk three are all the same occupation
Wage differentials BETWEEN occupations
is due to differences in the complexities of KSAs
Wage differentials WITHIN occupations
differences in KSAs within an occupational group for example, pharmacy technician and pharmacist
What are the three geographic pay differentials ?
- relative pay diff
*pay rate diff
*cost of living diff
Relative pay differentials
are often expressed as the
percentage difference between a specific location and the
national average
– The relative pay differential for Los Angeles is 20%
higher than the national average
pay rate differentials
are expressed in dollars as annual
or hourly pay differences for occupations based on
particular geographic regions and the nation overall
cost of living differences
between geographic locations
influence pay
The National Labor Relations Act of 1935 (NLRA)
requires private-sector employers to enter into good-faith negotiations with workers over the terms of employment.
- Collective bargaining agreement describes terms of employment
spillover effect
suggests that non union employers
tend to pay higher than they might otherwise pay in order
to avoid unionization
