Chp 11 Flashcards
Basic factors in determining pay rates
Aligning total rewards w/ strategy
Equity & its impact on pay rates
-equity theory of motivation
Legal considerations in company
Fair labor standards act(1938)
Equal pay Act (1963)
Employee retirement income security act (1974)
Other legislation
Fair labor standards act (1938)
4 Major Provisions:
1. Minimum wage-$7.25 in 2011
Some states/cities set own min wage
2. Overtime
3. Maximum hours
4. Child labor provisions -prohibits employment of minors(16-18) in hazardous occupations & restrictions employment of those under 16Exempt
Does not have to be paid overtime, therefore must be paid at least a certain amount
- executives
- administrative employees
- professions (architects)
- 12/1/16 increased white collar worker earning from >$100,000 & performing anyone exempt duty > $122,148 (90th percentile)
- 12/1/16 increased the salary level required for most of the white collar exemptions from $455/week ($23,660/year) to the 40th percentile of weekly earnings in the lowest wage census region: $913/week ($47,476/yr)
Independent contractor
- subject to self employment
- the payer has the right to control or direct only the result of the work & not what will be done & how it will be done
- determines own hours, not dictated by payer
- no benefits
Examples of exempt professionals
Lawyers Medical doctors Engineers Teachers Scientists Registered nurses Seasonal workers
Employee retirement income security act (ERISA) 1974
Created govt run, employer-financed corp to protect employees against failure of employers’ pension plans
Establish vesting rights-the amount of money in pension plan that cannot be forfeited for any reason.
Other factors
Union influences on compensation decisions
Pay policies
Geography-cost of living
Job evaluation
Systematic comparison done in order to determine the worth of one job relative to another in an organization
Compensable factors
Factors that establish how jobs are compared to determine pay
- Those used by Equal Pay Act
1. Skills
2. responsibility
3. effort
4. working conditions
Equal Pay Act
Important b/c if we have 2 ppl doing the jobs that have those 4 characteristics, they should get paid the same
Exempt-you are salary based earn $47,476
-no overtime
Exempt always applies to overtime
Comparable jobs
Are not & don’t have to get paid the same even though they have the same skill, effort,responsibility & working conditions
-determine how much to pay positions
Job evaluation methods: Ranking
A) identify jobs to be evaluated B) obtain job information (job analysis) C) select & group jobs D) select compensable jobs E) rank jobs F) combine ratings
Other job evaluation methods
1) job classification-jobs categorize into groups (same value) of classes (singular jobs)
2) point method- determine degree to which job being evaluated contain compensable factor (quantitative technique)
(Do position by position)
How to create a market competitive
Pay Plan
1) Draw current(internal) wage curve
2) Conduct market analysis
Salary survey (external)
a) commercial, professional,equip
3) using the internet to do compensation surveys
