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HRM > Establishing a Pay Structure > Flashcards

Establishing a Pay Structure Flashcards

1
Q

Total compensation

A 
Consists of:
1. Monetary rewards
Cash compensation
Benefits
2. Nonmonetary rewards
Interesting or fulfilling work
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2
Q

Job structure

A

Relative pay for different functions and jobs within the org

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3
Q

Pay level

A

Average amount, including wages, salaries and bonuses the org is going to pay

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4
Q

Structure

A

Pay rates
Pay grades
Pay ranges
Pay dfferentials

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5
Q

Legal requirements

A

Equal pay for equal work
Minimum wage
Overtime pay
Restrictions on child labor

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6
Q

Organization’s goals

A

High-quality workforce
Cost control
Equity and fairness
Legal compliance

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7
Q

Equal Employment Opportunity

A

An employer may not base differences in pay on age, sex, race or other

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8
Q

Equal Pay for comparable worth public policy

A

A remedy, which uses job evaluation to establish the worth of an organization’s jobs in terms of their difficulty and importance to the company.

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9
Q

Lilly Ledbetter Fair Pay Act of 2009

A

Allows employees claiming discrimination to treat each receipt of a paycheck as an instance of discrimination for purposes of determining their eligibility to file a complaint

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10
Q

Fair Labor Standard Act

A

A federal law that establishes a min wage and requirements for overtime pay and child labor

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11
Q

Exempt employees

A

Employees that do not fall under this rule:
Executives
Teachers
Computer professionals

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12
Q

Child labour

A

16-17: May not be employees in hazardous occupations
14-15: May work only outside school hours in non-hazardous jobs and for limited time periods
-14: May only work in non-hazardous job owned by parents or guardians

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13
Q

Laws govern pay policies of federal contractors

A

Davids-Bacon Act of 1931:
only construction contractors who receive more than $2000 in federal money

Walsh-Healy Public Contracts Act of 1936:
covers all gov contractors receiving $100000 or more in federal funds

Federal contractors must pay their employees at rates at least equal to their prevailing wages in the area

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14
Q

product markets

A

Organizations that offer competing goods and services

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15
Q

Consumer price index (CPI)

A

Trends in the nation’s cost of living

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16
Q

Pay range

A

SIze of the range depends on the details of the ogs competition environment

17
Q

Broad range

A

Pay below at or above the market level

18
Q

Above market level

A

Advantageous in situations where:

  • org structure id decentralized and performance us hard to measure
  • The company wants to attract top talent
19
Q

Equity theory

A

Look at their own ratio of outputs over inputs in comparison to the ratio of outputs over inputs of other workers

20
Q

Under-rewarded employees

A
  1. Put less effort
  2. Find a way to increase their outcomes
  3. WIthdraw by leaving the company
21
Q

Job evaluation

A

Administrative procedure for measuring the relative worth of the org jobs
Evaluation committee: familiar with the job, specialists and consultants

22
Q

Compensable factors

A

Characteristics of a job that the org values and chooses to pay for

23
Q

Pay surveys

A

Reveal the min and max rates for a job

Useful for key jobs –> jobs with stable content and common for many organizations

24
Q

Market pay policy line

A

A mathematical expression that describes the relationship between a job’s pay and its job evaluation points
It refelcts the pay structure of the market, which does not always match rates in the or BUT provides some guidance for non-key jobs

25
Q

Pay grades

A

Sets of jobs having similar worth or content, grouped together to establish rates of pay

26
Q

Advantage: Pay grades

A

Reduces administrative tasks and provides greater flexibility when assigning people to jobs

27
Q

Drawbacks: pay grades

A

Grouping jobs will result in rates of pay for individual jobs that do not precisely math the levels specified by the market and the org job structure.

28
Q

Pay differentials

A

IF company pays more to employees in locations where living expenses are higher
Avoid inequitable treatment of employees

29
Q

Delayering

A

Number of levels in the org job structure is reduced

30
Q

Skill-based pay system

A

Set pay according to employees’ level of skill or knowledge they acquire and their capability to use them

31
Q

Disadvantages: skill-based pay system

A
  • rewards for acquiring skills but not using them
  • if learn skill quickly might reach mac level fast makes it difficult to reward them
  • creates bureaucracy –> training programs must be developed
  • gathering data about skill-based pay is difficult
32
Q

Compa-ratio

A

Compare the ratio of average pay to the midpoint of the pay range
Should be close to 1

33
Q

Uniformed Service Employment and Reemployment Rights Act

A

Requires employers to make jobs available to their workers when they return after fulfilling military duties for up to five years

HRM (8 decks)

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