Exam 3- Chapter 10 Flashcards
Objective Of Pay System
- Strategic
- Attractive
- Equitable
- Motivating
- Complies with law and regulations
Pay Equity
My outcomes/inputs equals your outcomes/inputs
If not equitable/Fair (Your not Paid Fair)
- Less effort/withdraw effort
- Increase theft/stealing
- High turnover; quit
- Hurt Morale; create a hostile environment
- Will not look out for the best for the company
- Bad recruitment
- Rationalize, justify
Pay Structure
Starts with Job analysis
Splits into two categories:
A. Ensure Internal Consistency (Job Evaluation)
b. Ensure External Competitiveness (Market Survey #’s)
Last part is Pay structure/system
(Look at the diagram)
Three types of Different Job Evaluation
- Job Ranking system
- Job Classification
- Point System
Define Job Ranking System
Your find the most important jobs according to the firm and pay those jobs more. You determine the worth of the job and use market surveys to develop a pay structure system
Define Job Classification
You create different classifications of grades. Each grade has a description of the job, knowledge, etc. You than compare the job to the description you made to determine pay. Essentially you have a predetermine pay
Define Point system
A system where you have rank compensable factors with weights to see what job is most important to the firm
Broadbanning
The range of the salary is increased
Exempt vs Nonexempt
Exempt you cannot be paid for overtime
Nonexempt you can get paid for overtime
What are the general Employees
Executives Administrator Professionals Outside sales people Computer Employees
What the federal minimum wage
With insurance 7.25
no insurance 8.25
What are employee benefits required by law?
- social security
- unemployment insurance
- worker’s compensation
- Leave without pay (FMLA)
- Consolidated omnibus Budget (COBRA)
What are some discretionary benefits?
Health Insurance Child care Wellness programs Life and long term care insurance Payment for time not worked Pension plans
What are the four types of pension plan?
- Contributory
- Noncontributory
- Defined-Benefit
- Defined contributions
What is a contributory pension plan?
Both employer and employee contribute to your pension
What is a noncontributory pension plan?
The employer will be the only contributor to the pension plan
What is a defined-Benefit pension plan?
You are guaranteed a specific amount. It’s predetermine
What is a defined-contribution pension plan?
The way the company will make contributions to your pension. it can be through company stocks or cash.
What are characterstics of a 401 K plan
- Tax deferred saving plans ( you don’t pay taxes)
- employees save through payroll
Define Vesting and who regulates it?
The point in time when pension monies set aside by a company become the actual property of that individual.
ERISA is in charge of regulating pension plans and setting the minimum standard of vesting
What are some flexible employee benefits program/plan AKA Cafeteria Benefits
Pension plan Paid Vacations Paid sick leaves Medical Insurance Legal insurance Vision Care Tuition reimbursement
What are the pros and cons of a flexible employee benefits program?
Pros:
- Accommodate differences in employee needs
- Prevent Waste of benefits
- Employees gain a better understanding of the benefits
Cons:
- Difficult to design and administer
- High Administrative Cost
- Possible blame on employer for poor employee choices
