HR Final Exam Flashcards
1
Q
What is total compensation?
A
The package of quantifiable rewards an employee receives for labor, including base compensation, pay incentives, and indirect compensation/benefits.
2
Q
What are the three components of total compensation?
A
- Base compensation
- Pay incentives
- Indirect compensation/benefits
3
Q
What is base compensation?
A
The fixed pay an employee receives on a regular basis, either in the form of a salary or as an hourly wage.
4
Q
What are pay incentives?
A
A program designed to reward employees for good performance.
5
Q
What does indirect compensation/benefits include?
A
Health insurance, vacations, unemployment compensation.
6
Q
What percentage of workers’ compensation packages does indirect compensation make up?
A
Around 42%.
7
Q
What was the average total employee compensation spent by private-industry employers in 2024?
A
$46.84 per hour.
8
Q
What was the average total compensation for state and local government workers in 2024?
A
$62.92 per hour.
9
Q
What is the significance of an employee’s earnings in most societies?
A
Earnings serve as an indicator of power and prestige and are tied to feelings of self-worth.
10
Q
How can mishandling compensation issues affect a firm?
A
It is likely to have a strong negative impact on employees and ultimately on the firm’s performance.
11
Q
What is the two-pronged challenge managers face in designing a compensation system?
A
- Enable the firm to achieve its strategic objectives
- Mold the system to the firm’s unique characteristics and environment
12
Q
According to Daniel Kahneman, what income level is associated with happiness?
A
Household income below $75,000 is linked to unhappiness.
13
Q
What were the top factors in job satisfaction according to a Pew Research Center survey in 2024?
A
- Environmental and workplace relationships
- Career growth opportunities
- A fair and competitive salary
- Recognition and rewards
- Work-Life balance
- Leadership and management style
- A sense of autonomy
- A reasonable workload
- Culture alignment
- Job security
14
Q
What does the Davis-Bacon Act require?
A
Contractors on federally funded construction projects to pay wages and benefits at least equal to those prevailing in the area.
15
Q
What does the Copeland ‘Anti-Kickback’ Act prohibit?
A
Federal contractors from receiving kickbacks from employees or subcontractors for wages earned on federal projects.
16
Q
What is the Fair Labor Standards Act (FLSA)?
A
The fundamental compensation law in the U.S. that requires recording of earnings and hours worked.
17
Q
What are exempt employees under the FLSA?
A
Employees not covered by the provisions of the FLSA, typically in professional, administrative, and executive roles.
18
Q
What is the minimum wage set by the Fair Labor Standards Act?
A
$7.25/hour.
19
Q
What are the four exceptions that allow employers to pay one sex more than the other under the Equal Pay Act?
A
- More seniority
- Better job performance
- Greater quantity or quality of production
- Certain other factors like night shift compensation
20
Q
What is ‘comparable worth’?
A
A pay concept that calls for comparable pay for jobs that require comparable skills, effort, and responsibility.
21
Q
What is the Portal-to-Portal Act?
A
Defines what is included as hours worked and is compensable in calculating overtime.
22
Q
What is the purpose of the Work Opportunity Tax Credit (WOTC)?
A
To encourage employers to hire people from targeted groups.
23
Q
What are the objectives of a total compensation system?
A
- Be compatible with the organization’s mission and strategy
- Be compatible with the corporate culture
- Be appropriate for the workforce
- Externally equitable
- Internally equitable
24
Q
What are the life cycle stages of the compensation system?
A
- Introduction
- Growth
- Maturity
- Decline
25
What is an entitlement-oriented compensation system?
Fosters a caring feeling and wants employees to feel part of the family.
26
What is a contribution-oriented compensation system?
Views employees as contributors with performance-driven compensation programs.
27
What is a single-rate pay system?
Each job incumbent has the same rate of pay, regardless of performance or seniority.
28
What is a time-based step-rate system?
Rewards long-term employment and is best suited for routine jobs.
29
What is a performance-based/merit pay system?
Rewards and encourages superior performance based on individual performance measurement.
30
What are productivity-based systems?
Ties pay to the quantity of work performed and encourages high employee productivity.
31
What are person-based systems?
Focus on skill/knowledge levels and development of employees.
32
What are cost-of-living adjustments (COLAs)?
Pay adjustments given to all employees regardless of performance, usually based on the consumer price index.
33
What are lump-sum increases?
One-time payments of all or part of a yearly pay increase.
34
What is incentive pay designed for?
To motivate employees to perform at higher levels beyond normal expectations.
35
What are individual incentive plans?
Plans aimed at improving individual performance through various means like commissions or bonuses.
36
What are the advantages of individual incentive pay plans?
* Maximizes individual performance
* Highlights performance for employer and employee
* Broadens employee knowledge
37
What are group incentive pay plans?
Plans that reward group members for meeting or exceeding performance standards.
38
What is profit-sharing?
Payments provided in addition to normal pay, based on the organization’s profitability.
39
What is the distributive justice model of pay equity?
Employees exchange contributions for outcomes and compare their input/output ratio with others.
40
What does the labor market model of pay equity state?
The wage rate for an occupation is set where the supply of labor equals the demand for labor.
41
What is the labor market model of pay equity?
The wage rate for any given occupation is set at the point where the supply of labor equals the demand for labor in the marketplace.
42
How does the willingness of employers and workers affect wage rates?
The less employers are willing to pay and the lower the pay workers are willing to accept for a given job, the lower the wage rate for that job.
43
What is external equity in compensation?
External equity is achieved when the firm pays its employees the 'going rate' of the type of work they do.
44
What are the two types of pay equity a firm should establish?
Internal and external pay equity.
45
What is meant by 'match the market' in compensation strategy?
Pay approximately the same wages and offer a benefit package similar to that of the competition.
46
What does 'lead the market' mean in compensation practices?
Recruit and retain the most desirable talent from the labor pool by offering higher salaries and/or better benefits.
47
What is 'lag the market' in compensation terms?
Establish pay rates below those offered by other employers.
48
What is a 'sign-on bonus'?
A financial incentive offered to new employees to attract them without disrupting existing salary schedules.
49
What are 'retention bonuses'?
Incentives given to key employees to retain their expertise without raising the entire salary schedule.
50
What is the correlation between pay satisfaction and pay level?
Pay satisfaction is very highly correlated to pay level.
51
What is one effect of paying above-market wages?
Allows the firm to hire the 'cream of the crop' and minimize voluntary turnover.
52
What is the general trend regarding variable pay in the U.S.?
On average, 9% - 15% of an employee’s pay is variable, increasing with higher base pay.
53
What is fixed pay?
A stable salary that reduces the risk to employees and is easier to administer.
54
What is variable pay?
Compensation that can vary based on performance or company profitability.
55
What is 'performance-contingent compensation'?
Compensation tied to individual or group contributions, which can vary significantly.
56
What is 'membership-contingent compensation'?
Compensation that provides the same wage to all employees in a job if they meet satisfactory performance.
57
Define 'knowledge-based pay'.
A pay system where employees are paid based on the jobs they can do and the talents they possess.
58
What are some advantages of knowledge-based pay?
* Greater motivation for employees
* Easier reassignment to needed areas
* Reduces turnover and absenteeism costs
* Provides staffing flexibility
59
What are some criticisms of knowledge-based pay?
* Higher labor costs
* Greater difficulty in selecting applicants
* Potential for a chaotic workplace
60
What is the difference between monetary and nonmonetary rewards?
Monetary rewards are cash or cash-equivalent payments, while nonmonetary rewards are intangible benefits.
61
Give examples of nonmonetary rewards.
* Interesting work
* Challenging assignments
* Public recognition
* Family-friendly policies
62
What are elitist pay systems?
Pay plans where different compensation systems are established for employees at different organizational levels.
63
What are egalitarianism pay systems?
Pay plans where most employees are part of the same compensation system.
64
What is the advantage of open pay?
It forces managers to be fairer and more effective in administering compensation.
65
What is a disadvantage of open pay?
May lead to turnover of better performers who feel underpaid.
66
What is the difference between centralized and decentralized pay decisions?
Centralized systems control pay decisions from a central location, while decentralized systems delegate decisions to unit managers.
67
What is the goal of job evaluation?
To achieve internal equity in the pay structure by assessing the relative value of different jobs.
68
What is the first step in the job evaluation process?
Conduct job analysis.
69
What is job analysis?
The gathering and organization of information concerning the tasks, duties, and responsibilities of specific jobs
## Footnote
Job analysts can use personal interviews with workers, questionnaires, and business records to study various tasks.
70
What is a job description?
A written document that identifies, defines, and describes each job in terms of its duties, responsibilities, working conditions, and specifications.
71
What are job specifications?
Worker characteristics an employee must have to perform the job successfully, including prior work experience, education, and training.
72
What is a point factor system?
A system that uses compensable factors to evaluate jobs and determine their relative value or contribution to the organization.
73
What are compensable factors?
Work-related criteria that an organization considers most important in assessing the relative value of different jobs.
74
What is job hierarchy?
A listing of jobs in order of their importance to the organization, from highest to lowest.
75
What is a ranking system in job classification?
An evaluation method where a committee ranks job descriptions based on overall judgment of value.
76
What is a classification system in job classification?
A method where a committee sorts job descriptions into grades without using a point system.
77
What is the purpose of a market survey?
To determine the pay ranges for each grade level.
78
What is benchmarking in compensation?
Identifying a job that is similar or comparable in content across firms to link internal job-evaluation hierarchy to market salaries.
79
What should a firm decide regarding its pay policy?
Whether to lead, lag, or pay the going rate in the market.
80
What is a job-based compensation plan?
A compensation plan that does not consider the nature of the business and its unique problems.
81
True or False: Job-based compensation plans are flexible.
False
## Footnote
They tend to be bureaucratic and mechanistic.
82
What is job banding?
The practice of replacing narrowly defined job descriptions with broader categories (bands) of related jobs.
83
What are the advantages of broadbanding?
* Provides wider ranges
* Reduces the number of distinctions based on job value
* Enhances employee mobility
* Provides more autonomy to line managers
84
What are depth skills?
Skills acquired when employees learn more about a specialized area or become experts in a given field.
85
What are horizontal skills?
Skills acquired when employees learn more jobs or tasks within the firm.
86
What are vertical skills?
Skills acquired through self-management abilities, such as scheduling, coordinating, training, and leadership.
87
What are the distinct factors about executive pay plans?
* Incentives account for a greater share of total compensation
* Incentives linked to organization performance
88
What is a golden parachute?
Clauses in executive contracts providing special payment to executives who might lose their jobs.
89
What is a dual-ladder career progression?
A system allowing professionals to earn as much in senior technical positions as in management.
90
What challenges do small firms face in compensation systems?
* Lack of enough employees to justify a pay structure
* Difficulty in implementing elaborate compensation plans
91
What is the Internal Revenue Code?
It affects how much of their earnings employees can keep and how benefits are treated for tax purposes.
92
What percentage of individual income taxes is paid by the top 50% of taxpayers?
97.0%.
93
True or False: Approximately 40% of Americans pay no federal income tax.
True.
94
What is the main belief of most workers regarding pay?
Those who work harder and produce more should be rewarded accordingly.
95
What happens if employees perceive pay is not distributed based on merit?
They are more likely to lack commitment, decrease effort, and seek other employment opportunities.
96
What is pay-for-performance?
Incentive systems that reward employees based on their relative performance.
97
What syndrome is associated with pay-for-performance systems?
The 'Do only what you get paid for' syndrome.
98
What is a negative consequence of closely tying pay to specific performance indicators?
Employees may neglect other important job components that are harder to measure.
99
What was a major factor in the 2008 financial system meltdown?
Executive bonus systems incentivizing risky, speculative investments.
100
What unethical behaviors can arise from pay-for-performance systems?
Cutting corners, deceiving, misinforming, hiding negative information.
101
What is a common consequence of employees feeling under-rewarded?
They may attempt to sabotage projects or spread rumors.
102
What factors can affect employee performance but are beyond their control?
Supervisor, performance of other work group members, quality of materials, working conditions.
103
What makes measuring performance particularly challenging for managers?
Untangling individual contributions from group contributions while avoiding bias.
104
What is a psychological contract in the context of pay-for-performance systems?
An implicit agreement between employee and firm regarding rewards based on performance.
105
What can result from breaking a psychological contract?
Massive employee protests and lowering of morale.
106
What is a credibility gap regarding pay-for-performance programs?
Employees often do not believe that the programs are fair or truly reward performance.
107
How can pay-for-performance systems affect job satisfaction?
They may lead to greater productivity but lower job satisfaction.
108
What is a potential negative effect of emphasizing pay as an incentive?
It may stifle employees' talents and creativity.
109
What is the primary requirement for traditional piece-rate systems to work effectively?
The employee must have complete control over the speed and quality of their work.
110
What role do performance appraisals play in pay-for-performance systems?
They are crucial for the success or failure of the pay-for-performance plan.
111
Why is building employee trust important for pay-for-performance systems?
It ensures that employees attribute rewards to good performance rather than chance.
112
What is a multiple-layers-of-reward system?
Providing different types of pay incentives for different work situations.
113
What can help increase acceptance of a compensation plan?
Employee participation in the design of the pay plan.
114
What are some examples of nonfinancial rewards?
* Public and nonpublic praise
* Honorary titles
* Expanded job responsibilities
* Sabbatical leaves
* Mentoring programs
* Tuition reimbursements
115
What is merit pay?
A popular individual-based pay-for-performance plan determined by supervisor’s ratings.
116
How does a bonus program differ from merit pay?
Bonuses are one-time payments and do not permanently raise base pay.
117
What is a disadvantage of individual-based pay-for-performance plans?
They may create competition and destroy cooperation among peers.
118
What is the 'free-riding effect' in team-based pay plans?
Those who contribute little are rewarded equally, leading to complaints of unfairness.
119
Under what conditions are team-based plans most likely to succeed?
When work tasks are intertwined and the organization facilitates team-based initiatives.
120
What is one factor that can lead to the failure of individual-based pay-for-performance plans?
Subjectivity in performance appraisal and manipulation of ratings by managers.
121
What is the expectancy theory in the context of pay-for-performance?
Performance that is rewarded is likely to be repeated.
122
Under which conditions are team-based pay-for-performance plans most likely to succeed?
When work tasks are so intertwined that it is difficult to single out who did what, when the firm’s organization facilitates the implementation of team-based initiatives, when employees are committed to their group goals, and when technology allows for the separation of work into independent groups.
## Footnote
Team-based plans are often seen in research and development labs.
123
What are plant-wide pay-for-performance plans?
Plans that reward all workers in a plant or business unit based on the performance of the entire plant or unit, typically measured by efficiency and cost savings.
## Footnote
These plans are often referred to as gain-sharing programs.
124
What is the Scanlon plan?
A gain-sharing plan that relies on committees of employees, union leaders, and top managers to generate and evaluate cost-saving ideas.
## Footnote
If actual labor costs are lower than expected, the difference is shared between workers.
125
What is the Rucker plan?
A gain-sharing plan that uses worker-management committees to solicit and screen ideas, typically with a simpler structure than the Scanlon plan.
126
What is Improshare?
A gain-sharing plan that shares savings from producing an agreed-upon output in fewer hours than expected.
## Footnote
The standard identifies the expected number of hours required for production.
127
What are the advantages of plant-wide pay-for-performance plans?
* Increased productivity through a participative approach
* Cost savings from better employee treatment
* Enhanced cooperation through common goals
* Fewer measurement difficulties compared to individual incentives.
128
What are some disadvantages of plant-wide pay-for-performance plans?
* Protection of low performers
* Employees may expect bonus formulas to remain unchanged
* Limited labor-saving opportunities in a plant
* Potential management-labor conflict.
129
What conditions favor plant-wide pay-for-performance plans?
* Small to midsize firms
* Corporate culture supportive of employee participation
* Stability of the product market.
130
What characterizes corporate-wide pay-for-performance plans?
They reward employees based on the entire corporation’s performance, typically through profit sharing or employee stock ownership plans (ESOPs).
131
How does profit sharing differ from gain-sharing?
Profit sharing allocates a portion of declared profits to employees without attempting to reward productivity, while gain-sharing is based on cost savings.
132
What are the advantages of corporate-wide pay-for-performance plans?
* Financial flexibility
* Increased employee commitment
* Tax advantages.
133
What are the disadvantages of corporate-wide pay-for-performance plans?
* Employees face considerable risk
* High exposure to macroeconomic factors
* Limited effect on productivity.
134
What conditions favor corporate-wide plans?
* Larger firm size
* Interdependence of business units
* Favorable market conditions.
135
What is the average annual compensation for Fortune 500 CEOs?
$16.3 million, with approximately 25-30% being cash compensation.
136
What is a golden parachute?
A contractual agreement providing a CEO with a large payment if they are terminated, regardless of performance.
137
What are some common perks received by executives?
* Physical exams
* Financial counseling
* Club memberships
* Company plane access.
138
Why is designing pay-for-performance plans for salespeople different?
Earnings spread between salespeople is greater, performance variation is significant, and they are generally personally accountable for results.
139
What are the three types of compensation plans for salespeople?
* Straight salary
* Straight commission
* Combination plan.
140
When is a straight salary compensation plan most appropriate?
When maintaining good customer relations and servicing existing accounts are key objectives.
141
When is a straight commission compensation plan most appropriate?
When the key objective is to generate greater sales volume through new accounts.
142
What are the three compensation structures for salespeople?
Straight salary, straight commission, combination plan
143
When is a straight salary compensation most appropriate?
When maintaining good customer relations and servicing existing accounts are key objectives
144
What is the primary goal of straight commission compensation?
To generate greater sales volume through new accounts
145
What proportion of firms use a combination pay plan?
Three-fourths
146
What is a common incentive for rewarding excellence in customer service?
Incentive systems
147
Name three common measures of customer satisfaction used to determine incentive payments.
* Customer surveys
* Records of on-time delivery
* Number of complaints received
148
What types of customer service rewards can be implemented?
Individual, team, or plant-based
149
What unique challenges do small firms face regarding pay-for-performance programs?
* Lack of trained personnel
* Inability to afford professional help
* Limited grievance procedures
150
How can one disgruntled employee impact a small firm?
They can have a major impact on the morale of the entire organization
151
What is a major challenge for good employees in small firms?
Limited opportunities for promotion
152
What is a suggested approach for designing pay-for-performance systems in small firms?
Active employee participation in development
153
What benefit does active employee participation in pay-for-performance system design provide?
Generates commitment and increases perceptions of fairness
154
Why is informal feedback important in small firms?
To help employees improve performance
155
What should smaller firms do to attract and retain good employees?
Be generous in sharing profits
156
Fill in the blank: Small firms should use _______ to attract and retain good employees.
generous stock options
157
What are employee benefits?
Group membership rewards that provide security for employees and their family members
## Footnote
Also called indirect compensation.
158
What is the average annual cost of employee benefits for U.S. companies in 2024?
$29,972
## Footnote
According to the U.S. Bureau of Labor Statistics.
159
What percentage of employee benefits costs are attributed to medical and medically related benefits?
26.0%
160
What percentage of employee benefits costs are legally required?
25.9%
161
What is the percentage of costs for payment for time not worked in employee benefits?
23.1%
162
What types of services can employee benefits provide?
Coverage for sickness, injury, unemployment, and old age and death
## Footnote
Can also include services like childcare or exercise centers.
163
Who is the primary source of benefits coverage in the U.S.?
Employers
164
What is the trend in the cost of employee benefits as a percentage of payroll from 1929 to 2024?
Increased from 3% in 1929 to about 30-40% in 2024
165
What favorable tax treatment exists for group health benefit plans?
Employees receive benefits tax free
166
What is the average amount of retirement income provided by Social Security?
Averages about 33% of one’s earnings in the final year before retirement age
167
What is the maximum monthly Social Security benefit for someone retiring at age 67 in 2025?
$4,043
168
What is the minimum age for full Social Security benefits for those born in 1960 or later?
67
169
What does Medicare Part A cover?
Hospital costs, hospice, home health care
170
What is the average monthly Social Security disability income provided in 2025?
$1,580
171
What is required for an employee to be eligible for unemployment insurance?
Available for and actively seeking employment
## Footnote
Must have worked a minimum of four quarter-year periods out of the last five.
172
What is the federal unemployment tax rate for employers?
0.8 percent
173
What percentage of lost earnings do unemployment benefits typically cover?
Seldom more than 50%
174
What are the average unemployment benefits in Tennessee?
$275 per week
175
What is the purpose of workers' compensation?
Provides medical care, income continuation, and rehabilitation for job-related injuries or sickness
176
How is workers' compensation funded?
By a payroll tax paid by employers
177
What are some ways companies can control workers' compensation costs?
* Stress safe work procedures
* Audit claims
* Coordinate with health insurance benefits
* Design jobs to minimize injury risks
* Use modified duty plans
178
What are the eligibility criteria for survivor benefits under Social Security?
* Widows and widowers aged 60 and over
* Caregivers for a child aged 16 or younger
* Unmarried child or grandchild younger than 18
* Dependent parent aged 62 or over
179
What is the maximum survivor benefit in 2025?
$1,832/month
180
What is the projected shortfall of the Social Security program by 2034?
$2.31 trillion
181
What two proposed solutions exist to address Social Security's financial issues?
* Immediate 3.44% increase in payroll tax
* Immediate 21.3% reduction in scheduled benefits
182
What is the role of unions in employee benefits?
Have been in the forefront of the movement to expand employee benefits
183
What is the importance of a benefits mix?
Complete package of benefits offered to employees
184
What are the top five employee benefits that employees are quitting over in 2023?
* Higher pay
* Better benefits
* Better advancement opportunities
* Flexible work-home options
185
True or False: The United States mandates only four benefits.
True
186
Fill in the blank: The federal tax policy provides ______ for group health benefit plans.
favorable tax treatment
187
What percentage of salary do workers in Japan receive for unemployment benefits?
80 percent of salary for up to one year
188
What is the unemployment benefit percentage and duration for France?
75 percent of salary for 24 months
189
What is the unemployment benefit percentage for Germany?
60 percent of salary for 12 months
190
What percentage of salary do workers in Sweden receive for unemployment benefits?
80 percent of salary for 15 months
191
What does FMLA stand for?
Family and Medical Leave Act
192
What is the maximum unpaid leave duration required by FMLA?
Up to 12 weeks
193
What are some reasons for taking FMLA leave?
* The birth of a child
* The adoption of a child
* To care for a sick family member
* To address the employee’s own serious health problems
194
What percentage of American workers are not eligible for FMLA?
44%
195
How many employees must a business have for FMLA to apply?
50 or more employees
196
What must employers maintain for employees on FMLA leave?
Coverage of health insurance and other employee benefits
197
What does COBRA stand for?
Consolidated Omnibus Budget Reconciliation Act
198
How long can employees continue their health insurance under COBRA?
18 to 36 months
199
What is the maximum deductible for a health savings account (HSA) for singles in 2025?
$4,300
200
What is the purpose of the Health Insurance Portability and Accountability Act (HIPAA)?
To protect an employee’s ability to transfer between health insurance plans without a gap in coverage due to pre-existing conditions
201
What does the Mental Health Parity Act require?
Parity between mental health benefits and medical benefits
202
What federal law guarantees affordable health care in the U.S.?
Patient and Affordable Care Act (PACA)
203
What is a high-deductible health plan (HDHP)?
A health plan that requires employees to pay for the first few thousand dollars of medical costs each year
204
What are the three main sources of retirement income?
* Social Security
* Personal savings
* Retirement benefits
205
What does ERISA stand for?
Employee Retirement Income Security Act
206
What is the purpose of ERISA?
To protect employees’ retirement benefits from mismanagement
207
What are defined benefit plans?
Retirement plans that promise a fixed dollar amount of retirement income based on a formula
208
What is the role of the Pension Benefit Guaranty Corporation (PBGC)?
To provide a guarantee for the payment of retirement benefits
209
True or False: Employers must maintain health insurance benefits for employees on FMLA leave.
True
210
Fill in the blank: Under COBRA, employees who quit or are discharged are entitled to ______ months of continued group health insurance coverage.
18
211
What is a defined benefit plan?
A retirement plan that promises to pay a fixed dollar amount of retirement income based on a formula that takes into account the average of the employee’s last three to five years’ earnings prior to retirement
## Footnote
Employer assumes all risks of providing the promised retirement; most appropriate for firms wanting to provide secure and predictable retirement income
212
Who assumes the risks in a defined benefit plan?
The employer
## Footnote
This type of plan is less appropriate for firms that stress risk-taking and/or want employees to share in providing for their retirement
213
What are defined contribution plans?
A retirement plan in which the employer promises to contribute a specific amount of funds into the plan for each participant
## Footnote
Employees may also be required to make additional contributions
214
What is the relationship between defined contribution plans and employee risk?
Employees assume investment risks, and the retirement income depends on the success of the plan’s investments
## Footnote
This plan is used by companies that value employee risk-taking and participation
215
Name the most common types of defined contribution plans.
* 401(k) plans
* Individual retirement accounts (IRA)
* Simplified employee pension plans (SEP)
* Profit-sharing Keogh plans
## Footnote
These plans can be challenging for low-wage earners
216
What is a 401(k) plan?
A qualified plan established by employers to which eligible employees may make salary contributions on a post-tax and/or pre-tax basis
## Footnote
Employers may also make matching or non-elective contributions
217
What are the tax implications of 401(k) earnings?
Earnings accrue on a tax-deferred basis
## Footnote
IRS regulations usually limit the percentage of contributions
218
What is the contribution limit for IRAs in 2025?
Up to $7,000 per year per person ($8,000 if over age 50)
## Footnote
This contribution is tax-deferred until cashing it in at retirement
219
What is a Roth IRA?
Allows contributions of after-tax income with tax-free accumulation of interest and distributions
## Footnote
Contributions are limited to $7,000 in 2025 ($8,000 if 50 or over)
220
What is a simplified employee pension (SEP)?
A retirement plan available only to self-employed individuals or small businesses without a retirement plan
## Footnote
Eligible individuals can invest up to 25% of their annual income or $70,000 in 2025
221
What is a profit-sharing Keogh plan?
Allows employers to contribute to an employee’s retirement account based on company profits
## Footnote
Contributions are flexible based on company performance
222
What is group-term life insurance?
Basic term life insurance that pays a benefit to survivors of a deceased employee, usually one or two times the employee’s annual income
## Footnote
Coverage is only while the employee is employed
223
What does short-term disability insurance typically cover?
Replaces 50% to 70% of lost income for up to six months
## Footnote
May require a waiting period
224
What is the primary cause of long-term disability?
Chronic disease
## Footnote
Common issues include cardiovascular problems, musculoskeletal issues, and cancer
225
What percentage of salary does long-term disability insurance typically replace?
70 to 80 percent
## Footnote
This includes Social Security benefits
226
What are the common components of paid time off (PTO)?
* Sick leave
* Vacations
* Severance pay
* Holidays
## Footnote
PTO policies allow for personal reasons and emergencies
227
How can companies minimize sick day abuse?
* Wellness day incentive programs
* Flexible work hours
* Lump-sum rewards for unused sick days
* Paid time off (PTO) banks
## Footnote
These strategies encourage responsible use of sick leave
228
What is severance pay?
Compensation given to laid-off employees to cushion the shock of termination and finance their job search
## Footnote
Varies widely by organization
229
What are employee services?
Tax-free or tax-deferred services to enhance employees’ work or personal life
## Footnote
Examples include childcare, health club memberships, and discounts on company products
230
What are the benefits of flexible benefits (Cafeteria Plans)?
* Tailored to employee needs
* Flexible as life changes
* Efficient use of benefits
* Favorable tax treatment
## Footnote
Employers can lower costs over time
231
What is a challenge with flexible benefits?
Adverse selection
## Footnote
This can drive up costs if certain benefits are used more than average
232
What is the best way to communicate benefits to employees?
In a comfortable, confidential setting by HR or the employee’s manager
## Footnote
Many employees underestimate the value of their benefits
233
What are employee rights?
Ability to engage in conduct that is protected by law or social sanction, free from interference by another party.
234
Name the three categories of employee rights.
* Statutory rights
* Contractual rights
* Other rights
235
What are statutory rights?
Rights protected by specific laws enacted by government.
236
What does Title VII protect employees from?
Discrimination on race, sex, religion, national origin, age, disability or other protected status.
237
Which act regulates health and safety practices at companies?
Occupational Safety and Health Act (OSHA).
238
What is the role of the National Labor Relations Board (NLRB)?
Regulates employer and employee conduct to ensure fair labor practices.
239
Define contractual rights.
Legally binding promise between two or more competent parties.
240
What is a breach of contract?
One of the parties does not perform his or her promised duty to the other party.
241
What percentage of the U.S. labor force works under employment contracts?
Less than 11%.
242
What kind of job security does an employment contract typically provide?
Some type of job security.
243
What are some restrictions employers in competitive industries may impose?
* Disclose trade secret information
* Solicit business from former customers
* Attempt to hire former coworkers
244
What percentage of employees in the U.S. are covered by union contracts?
About 10%.
245
What is the 'last in, first out' layoff criterion?
Protects the jobs of the most senior workers.
246
What is an implied contract?
A contract that exists without formal written agreement, based on actions or statements.
247
What does the National Labor Relations Act allow employees to discuss?
* Wages and benefits
* Working conditions
* Whistleblower reports
248
What is the psychological contract?
The expectation of fair and ethical treatment in return for work.
249
List ways managers can influence a climate of fairness.
* Build trust
* Act consistently
* Be truthful
* Keep confidences
* Meet with employees
250
What is the limited right to privacy?
Protection from unreasonable or unwarranted intrusions into personal affairs.
251
What act protects federal employees' privacy rights?
Privacy Act of 1974.
252
True or False: Employers can legally discipline employees for damaging speech.
True.
253
What can employees not be prohibited from discussing with coworkers?
* Salary
* Working conditions
254
What is employment at will?
Common-law rule allowing employers to end an employment relationship at any time.
255
What are public policy exceptions to employment at will?
An employee cannot be discharged for engaging in activities protected by law.
256
What is the average cost of wrongful discharge cases?
Around $42,500.
257
What is random drug testing?
Management's duty to protect safety vs. employee's right to privacy.
258
What percentage of U.S. firms report using some form of drug testing?
56%.
259
What is electronic monitoring?
Use of surveillance devices to monitor employee behavior.
260
What are the potential downsides of electronic monitoring?
Can lead to stress and dehumanization of the workplace.
261
What is whistle-blowing?
Employee disclosure of illegal, immoral, or illegitimate practices.
262
What protections do federal whistle-blowers have?
Certain legal protections against retaliation.
263
What is moonlighting?
Holding a second job outside normal working hours.
264
Fill in the blank: Random drug testing pits management’s duty to protect safety against an employee’s right to ______.
privacy.
265
How does the company benefit when a whistle-blower steps forward?
The company can address and correct corruption or misconduct, which can improve its reputation and operational integrity.
266
What can HR staff do to reduce the fear and risk to employees from being a whistle-blower?
HR can implement protective policies, provide confidential reporting channels, and ensure non-retaliation measures.
267
Define moonlighting.
Moonlighting is holding a second job outside normal working hours.
268
What percentage of full-time employees are estimated to hold a second job?
Approximately 6% of employees.
269
What should management rely on to manage moonlighting?
Job performance and conflict-of-interest policies.
270
What is a potential violation of employee rights regarding moonlighting?
Restrictions on employees who moonlight may violate their rights in certain situations.
271
What are the risks associated with office romance?
Increased risk of sexual harassment claims and potential conflicts of interest.
272
What percentage of employers reported having a sexual harassment claim filed due to workplace romance?
27.7 percent of employer respondents.
273
What is the impact of workplace relationships on work performance according to recent surveys?
57% reported that workplace relationships have impacted their work performance.
274
What is the most common reason for disciplinary action against employees?
Performance issues.
275
List common reasons for disciplinary action.
* Drug or alcohol abuse
* Breaking a company rule
* Absenteeism
* Late arrival/early departure
* Insubordination
* Harassment
276
What is progressive discipline?
A series of management interventions that gives employees opportunities to correct undesirable behaviors before being discharged.
277
What are the typical steps in a four-step progressive discipline procedure?
* Verbal warning
* Written warning
* Suspension
* Discharge
278
What is positive discipline?
A discipline procedure that encourages employees to monitor their own behavior and assume responsibility for their actions.
279
What is the first step in a four-step positive discipline procedure?
The first counseling session ends with a verbal solution acceptable to both employee and manager.
280
What does due process in discipline entail?
Maintaining an open-door policy, communicating rules, and allowing opportunities to correct behavior.
281
What is the just cause standard of discipline?
A requirement to prove that an employee was discharged for just cause, including various fairness criteria.
282
What is workplace bullying?
A persistent pattern of offensive, abusive, intimidating, or malicious behavior focused on a target employee.
283
What percentage of U.S. workers have experienced workplace bullying?
30% have experienced it, and 19% have witnessed it.
284
What should companies do to address workplace bullying?
Develop zero tolerance for bullying and establish value statements promoting respect.
285
What challenges do managers face with alcohol-related misconduct?
Employees may deny having a problem, and alcoholism can mask attendance or performance issues.
286
What is required for an employee to be tested for alcohol use at work?
There must be reasonable suspicion.
287
How is illegal drug use viewed in comparison to alcohol use?
Illegal drug use is socially unacceptable, while moderate alcohol use is generally acceptable.
288
What can help prevent the need for discipline in human resource management?
Effective recruitment and selection of applicants with career potential.
289
What is socially unacceptable in contrast to the use of alcohol in moderation?
Use of illegal drugs
## Footnote
The use of illegal drugs is often stigmatized in society, while moderate alcohol consumption is generally accepted.
290
What symptoms may mask illegal drug use?
Inattention and unexplained absences
## Footnote
These symptoms can often lead to misinterpretation of an employee's behavior.
291
What should managers do if they suspect drug addiction in an employee?
Refer the employee to EAP counseling
## Footnote
Employee Assistance Programs (EAP) provide support and counseling for employees with substance use issues.
292
What should be documented by managers to support disciplinary procedures?
Performance problems
## Footnote
Documentation is crucial for justifying termination if necessary after counseling and treatment.
293
What is one way to prevent performance problems in employees?
Choosing applicants who have career potential
## Footnote
This approach reduces the likelihood of future performance issues.
294
What should be checked during the recruitment process?
References and background information
## Footnote
Gathering this information helps assess applicants’ work habits and character.
295
How can biases in hiring decisions be reduced?
Multiple interviews with diverse groups
## Footnote
Involving various groups in the interview process can lead to more balanced hiring decisions.
296
What types of tests can be administered to job candidates?
Personality tests or honesty tests
## Footnote
These tests can provide additional insights into a candidate's suitability for a role.
297
What is an effective way to communicate values to new employees?
An effective orientation program
## Footnote
Orientation programs are crucial for integrating new employees into the company's culture.
298
What type of training programs can help reduce skill gaps?
Training programs for new employees
## Footnote
These programs aim to improve competencies and ensure new hires are well-prepared.
299
What should retraining programs focus on?
Continuing employees whose skills have become obsolete
## Footnote
Retraining helps keep the workforce updated with current skills and knowledge.
300
What should supervisors be trained to do?
Coach and provide feedback to their subordinates
## Footnote
This encourages proactive intervention in employee performance issues.
301
What do career ladders provide for employees?
Incentives to develop a long-term commitment
## Footnote
Career ladders motivate employees to engage in positive workplace behaviors.
302
What should performance appraisals set?
Reasonable standards that employees understand
## Footnote
Clear performance expectations are essential for employee accountability.
303
What is important for supervisors to provide during appraisals?
Continuous feedback
## Footnote
Regular feedback helps employees improve and stay aligned with performance standards.
304
Why should employee appraisals be documented properly?
To protect employers against wrongful discharge or discrimination suits
## Footnote
Proper documentation ensures legal protection for the employer.
305
What should pay policies be perceived as by employees?
Fair
## Footnote
Perception of fairness in pay is crucial for employee morale and engagement.
306
What can happen if employees believe pay policies do not recognize their contributions?
They are more likely to withhold future contributions
## Footnote
This can lead to decreased productivity and engagement in the workplace.
307
What should be established to allow employees to challenge pay decisions?
An appeal mechanism
## Footnote
This can prevent conflicts and promote a more positive work environment.
308
What is good employee relations?
Providing fair and consistent treatment to all employees.
## Footnote
Includes treating employees as stakeholders with rights and with dignity and respect.
309
What must managers do to maintain good employee relations?
Listen to employees, keep them informed, and allow them to air grievances.
## Footnote
This includes communicating management plans and how they may affect jobs.
310
What is the purpose of an employee relations policy?
To communicate management’s thinking and practices concerning employee-related matters.
## Footnote
It also aims to prevent workplace problems from becoming serious.
311
Who typically serves as an employee relations representative?
Often a member of the HR department.
## Footnote
They ensure company policies are followed and consult on employee relations problems.
312
What are common employee relations problems?
* Disagreements over wages and time worked
* Salary increases
* Conflict resolution
* Disputes over company leave time
## Footnote
Each issue can lead to frustration and misunderstandings.
313
What is the employee attraction stage?
The time when a company tries to attract the right employees to come to work for it.
314
What happens during the recruitment stage?
The company actively seeks out top-notch employees to work for the organization.
315
What is the adjustment or on-boarding stage?
The time it takes to acclimate new hires to new positions as smoothly as possible.
316
What is the career development stage?
The time when the employee begins to create the career path they will take while employed.
317
What is the employee recognition and retention stage?
The time when the company and the employee decide if they will continue working together.
318
What is the separation or off-boarding stage?
When the employee’s time with the company comes to an end.
319
Name three employee attraction strategies.
* Maintain a great company culture
* Stay visible within your industry
* Offer strong compensation and benefits packages.
320
What is essential during the recruitment stage?
Focusing on potential hires who fit your company culture.
321
What should be included in job descriptions during the on-boarding stage?
Concise job descriptions and a discussion of the company’s mission and values.
322
What should be encouraged during the development stage?
Encourage team members to pursue outside training opportunities.
323
What are some strategies for employee retention?
* Find and hire the right people
* Keep track of employee morale
* Understand individual motivators.
324
What is a key aspect of building positive employee relations?
Offering competitive salaries and an attractive benefits package.
325
What is a crucial communication channel for good employee relations?
A communication channel that provides access to important information and opportunities to express ideas and feelings.
326
What are the benefits of employee involvement?
* Fosters consensus decision making
* Increases commitment to decisions
* Improves quality of work life.
327
What are two types of information in employee communications?
* Facts
* Feelings.
328
What must communication channels provide for effective communication?
Options for face-to-face communication.
329
True or False: Men and women communicate the same way in a work environment.
False.
330
How do men and women differ in their use of body language?
Men often communicate verbally, while women incorporate more non-verbal cues.
331
What do men typically view apologizing as?
A sign of weakness that compromises authority.
332
How do women typically use compliments in communication?
To build trust and show they are not a threat.
333
What is the difference in focus between men's and women's conversations?
Men's conversations are often fact-based, while women's conversations tend to explore feelings.
334
What is the role of meetings in encouraging effective communication?
Facilitate dialogue and promote personal relationships.
335
What is the purpose of an employee handbook?
To set the tone of overall company employee relations philosophy and communicate policies.
336
Why should employee handbooks be updated regularly?
To reflect the current legal environment and company philosophy.
337
What is a common problem associated with electronic mail (e-mail)?
Information overload.
338
What is a potential issue with employees viewing their e-mails?
They may perceive them as private property immune to employer inspection.
339
What is the significance of informal communications in the workplace?
They can pass along information not available through formal modes and foster creative ideas.
340
What is the purpose of combining business and recreational activities in a relaxing location?
To develop creative ideas for long-term planning or implementing changes in practices.
341
What interpersonal skills can activities like mountain climbing and whitewater rafting encourage?
Development of interpersonal skills.
342
What can informal communication among employees, often referred to as the 'grapevine', function as?
A source of creative ideas.
343
True or False: Informal communication can lead to distorted information due to rumors and gossip.
True.
344
What is a potential negative result of distorted informal communication?
Poor employee morale and employee relations.
345
What are cliques in the workplace?
Informal social groups that may disrupt the flow of information by excluding certain employees.
346
How can team performance be negatively affected by cliques?
By creating tension between cliques and excluded employees.
347
One way to deal with cliques is to _______.
Rotate team members between different projects.
348
What is Management by Walking Around (MBWA)?
A way to monitor informal communication by talking to employees informally.
349
How can gossip sometimes be beneficial in the workplace?
Employees can learn about free riders, bullies, and difficult colleagues.
350
What is the main purpose of employee feedback programs?
To improve management-employee relations by giving employees a voice in decision making.
351
What are the most common employee feedback programs?
* Employee attitude surveys
* Appeals procedures
* Employee assistance programs
352
What do employee surveys assess?
Employee perceptions about the work environment.
353
Which country has the highest percentage of satisfied workers?
India (91%).
354
True or False: Employees are generally critical in their evaluations during anonymous surveys.
True.
355
What is a key benefit of conducting employee surveys?
Provide a direct means of assessing employee attitudes.
356
What is a focus group?
A small group of employees invited to participate in a structured discussion.
357
List one advantage of focus groups.
* Provide a flexible format for discussion
* Faster and less costly to complete than surveys
358
What is a disadvantage of focus groups?
Tends to foster 'group think' conformity.
359
What should be secured to ensure effective employee surveys or focus groups?
Management support.
360
What is the role of appeals procedures in an organization?
Allows employees to voice their reactions to management decisions.
361
What is an open-door policy?
An informal procedure for employees to bring problems to management’s attention.
362
What are Employee Assistance Programs (EAPs)?
Company-sponsored programs that help employees cope with personal problems.
363
What is the first step when dealing with a troubled employee in an EAP?
Identifying the troubled employee and referring them to counseling.
364
What percentage of workers in the U.S. have access to EAPs?
More than 79 million workers.
365
What can employee recognition programs enhance?
Relations by communicating that the organization cares.
366
What are recognition awards designed to do?
Give public credit to teams or employees that make outstanding contributions.
367
What should be included in the guidelines for implementing suggestion systems?
* Provide a simple, easy process
* Use a suggestion evaluation committee
* Implement accepted suggestions immediately
368
What is a union?
An organization that represents employees’ interests to management on issues such as wages, work hours, and working conditions.
369
What activities do employees participate in within a union?
Administering the union and supporting its activities with union dues.
370
What protects employees' right to join and participate in unions?
Legal protections established by labor laws.
371
Why do employees join unions?
Reasons include dissatisfaction with job aspects, feeling lack of influence with management, and seeing unionization as a solution.
372
What is a primary reason companies prefer a nonunion workforce?
Wages are typically higher for union workers, which can put unionized companies at a competitive disadvantage.
373
What are some positive social benefits of unions?
Unions can reportedly boost productivity in some companies in certain situations.
374
What was the approach of the U.S. government to unions prior to 1935?
The employment relationship was considered private, with both employees and employers free to accept or reject the relationship.
375
What significant event contributed to the legalization of union activity?
The Great Depression (1929 – 1938) led to the Wagner Act (1935), which attempted to equalize the power of employees and employers.
376
What is the Wagner Act?
A 1935 law that protects employees' rights to form and join unions and engage in activities like strikes and collective bargaining.
377
What agency was created by the Wagner Act?
The National Labor Relations Board (NLRB).
378
What are the primary functions of the NLRB?
* Administer certification elections
* Prevent and remedy unfair labor practices.
379
What are the five illegal labor practices identified by the Wagner Act?
* Interfering with employees' rights
* Dominating or interfering with union formation
* Discriminating against union members
* Discharging employees for filing charges
* Refusing to bargain collectively.
380
What is the purpose of the Taft-Hartley Act?
To limit some of the power that unions acquired under the Wagner Act and to protect the rights of management and employees.
381
What controversial provision does the Taft-Hartley Act include?
Permission for states to enact right-to-work laws.
382
What is a right-to-work law?
A law that makes it illegal for a union to include a union shop clause in its contract.
383
What is the Landrum-Griffin Act?
A 1959 act that protects union members and regulates union activities.
384
What is business unionism?
A form of unionism focusing on improving workers’ economic well-being and 'bread-and-butter' issues.
385
How are U.S. unions typically structured?
By type of job, often arranged into locals governed by a national body.
386
What is the AFL-CIO?
A confederation of many different unions representing approximately 14.1 million union workers.
387
What is the primary mechanism for developing labor rules in the U.S.?
Collective bargaining.
388
What does a labor contract spell out?
The conditions of employment and work rules affecting employees in the unit represented by the union.
389
What is a decertification election?
An election that allows employees to remove a union they no longer want.
390
What percentage of the total U.S. workforce is unionized as of the latest data?
10.1%.
391
What are some reasons for the decline in union membership?
* Shrinking blue-collar jobs
* Increased employment legislation
* Hostile labor relations strategies
* Educated workforce
* Legal issues of union leaders.
392
Despite declining membership, how do unions continue to influence nonunion employees?
They establish wage and benefit patterns that indirectly affect about 40 to 50 percent of the U.S. labor force.
393
What percentage of the U.S. labor force do unions indirectly affect?
40 to 50 percent
394
What are two significant contributions of unions beyond wage negotiations?
Worker safety measures and anti-discriminatory labor practices
395
What is the union membership rate for public-sector workers?
32.5%
396
What is the union membership rate for private-sector workers?
6.3%
397
Why are public-sector workers more likely to be organized than private-sector workers?
They tend to have less bargaining power
398
What are two approaches to union avoidance?
* Union substitution
* Union suppression
399
What is the goal of the union substitution approach?
Remove the incentive for unionization by addressing employee needs
400
What tactics are involved in the union suppression approach?
Hardball tactics to prevent union organization
401
What is required for a union to show significant interest in unionization?
Minimum of 30 percent of employees must sign an authorization card
402
What must managers avoid during the pre-election conduct phase?
* Threatening employees with job loss
* Promising benefits for voting against the union
* Intimidating or coercing employees
403
What is a certification election?
An election supervised by the NLRB to determine if a union will become the bargaining agent
404
What happens if a union loses a representation election?
No other representation election may be held for a 12-month period
405
What are the four important issues related to collective bargaining?
* Bargaining behavior
* Bargaining power
* Bargaining topics
* Impasses in bargaining
406
What does good faith bargaining entail?
Meeting and negotiating over mandatory topics like wages and hours
407
What is bargaining power?
The ability to get the other party to agree to its terms
408
What are the two tactics used to increase bargaining power?
* Distributive bargaining
* Integrative bargaining
409
What is the focus of distributive bargaining?
Convincing the counterpart that the cost of disagreement is high
410
What is the focus of integrative bargaining?
Finding mutually beneficial alternatives and solutions
411
What are the three categories of bargaining topics classified by the NLRB?
* Mandatory
* Permissive
* Illegal
412
What are mandatory bargaining topics?
* Wages
* Hours
* Employment conditions
413
What are examples of permissive bargaining topics?
* Benefits for retired union members
* Provisions for union members on company boards
414
What are examples of illegal bargaining topics?
* Closed shop agreements
* Featherbedding
* Discriminatory employment practices
415
What is the Employee Free Choice Act (EFCA) also known as?
CardCheck
416
What would the EFCA allow regarding union formation?
Workers could form unions without a secret-ballot election
417
What is a decertification election?
An election to determine if a union should lose its right to represent employees
418
What can lead to decertification of a union?
* Fair treatment of employees by employers
* Poor service by unions
* Inability to negotiate an effective contract
419
What can be discussed during collective bargaining if both parties agree?
Permissive topics such as provisions for some union members to serve on the company’s board of directors, benefits for retired union members, including supervisors in the labor contract.
## Footnote
Neither party is obligated to bargain on these topics.
420
What are illegal bargaining topics that may not be discussed in collective bargaining?
Closed shop agreements, featherbedding, and discriminatory employment practices.
## Footnote
These topics are prohibited in collective bargaining.
421
What is the significance of a credible strike threat in the collective bargaining process?
It motivates both parties—union and management—to move towards a settlement and reach a labor agreement.
## Footnote
Without a credible strike threat, the likelihood of reaching a joint agreement decreases.
422
What is an impasse in bargaining?
A situation where the parties cannot agree on one or more mandatory issues.
## Footnote
A labor contract cannot be finalized until both sides obtain approval from their organizations.
423
What happens if impasse persists in bargaining?
A strike may result, and either party may ask a mediator for help.
## Footnote
Mediators do not have the authority to impose a settlement.
424
What are the costs imposed by a strike on union members?
They receive no wages or benefits until they return to work, risking job loss to permanent replacement workers.
## Footnote
A long strike may exhaust the strike fund.
425
What are the costs imposed by a strike on management?
Management faces significant costs, including operational shutdowns and potential bankruptcy.
## Footnote
Strikes can force companies to lose customers in a highly competitive market.
426
What is an economic strike?
A strike that occurs when an agreement is not reached during collective bargaining.
427
What is a wildcat strike?
A spontaneous work stoppage that occurs under a valid contract, usually not supported by union leadership.
## Footnote
It often happens due to management's disciplinary actions.
428
What is a lockout?
A management tool used to shut down operations during a labor dispute to protect against economic hardship.
## Footnote
It may be used during bargaining impasses.
429
What is the grievance procedure?
A step-by-step method designed to settle disputes regarding the interpretation of the labor contract.
## Footnote
It is the preferred method for resolving disputes between unionized workers and management.
430
What are the two significant advantages of the grievance procedure?
* Provides the employee with an advocate (union steward)
* Arbitration decision is binding on both parties.
431
What is arbitration in the context of a grievance procedure?
The last step where both parties present their cases, and the arbitrator makes a binding ruling.
## Footnote
About 1.6% of grievances reach this stage.
432
What is alternative dispute resolution (ADR)?
An umbrella term for several problem-solving and grievance resolution approaches outside of the courtroom.
433
What type of grievance is based on union members’ rights under labor contracts?
Contract interpretation grievance.
## Footnote
It may go to arbitration if the contract's language is ambiguous.
434
What is the expectation for management during employee discipline grievances?
Management has the burden of proof to show that discipline was warranted and that the employee received due process.
435
What is the last in, first out rule?
A layoff rule where the last employees hired are the first to be laid off.
436
What is the impact of unions on employee development?
Performance appraisals are limited, often used only for feedback rather than determining pay raises or promotions.
437
How does union membership affect employee wages?
Unionized firms typically pay higher wages than nonunion firms, averaging $1,216/week versus $1,029/week.
438
What effect does a union have on a company's compensation policies?
Unions typically result in higher total compensation costs and affect policies on pay raises, favoring across-the-board raises over merit pay.
439
What is the difference between defined benefit plans and defined contribution plans?
* Defined benefit plans provide a fixed amount upon retirement
* Defined contribution plans require the employer to set aside a portion of income each month.
440
What is the Weingarten right?
The right of an employee to have a union representative present during questioning that could lead to discipline.
441
What is the role of the union in employee relations?
The union empowers employees by giving them a voice in the development of work rules affecting their jobs.
442
What does occupational health signify?
A state of well-being, free of illness or disease, focusing on employee overall well-being both on and off the job.
443
Define safety in the context of occupational health.
Freedom from hazard, risk, or injury, focusing on preventing work-related accidents and injuries.
444
What is meant by security in occupational health?
The reduction or elimination of the risk of loss of an organization’s assets including property, employees, and intellectual capital.
445
Why do companies invest in healthful, safe, and secure work environments?
Due to the personal and economic tolls that result from accidents and health problems.
446
What was the number of non-fatal injuries and illnesses in private industry in 2023 according to the Bureau of Labor Statistics?
946,500 non-fatal injuries and/or illnesses.
447
How many on-the-job fatalities were reported in 2023?
5,283 deaths.
448
What trend has been observed in on-the-job fatalities and injuries in the U.S.?
They have been decreasing.
449
What is the Americans with Disabilities Act (ADA)?
It requires reasonable accommodation for the health and safety of employees with disabilities.
450
What does the Fair Labor Standards Act (FLSA) prohibit?
Employment of persons under the age of 18 in certain high-risk (hazardous) industries.
451
What is workers' compensation?
An insurance program provided by each state, paid for by employers, designed to protect workers in case of a work-related injury or disease.
452
What does the Occupational Safety and Health Act (OSHA) of 1970 aim to achieve?
* Encourage reduction of safety and health hazards
* Perfect safety and health programs
* Create the Occupational Safety and Health Review Commission
* Establish standards to eliminate industrial diseases
* Provide effective enforcement of safety and health standards
453
Who does the Occupational Safety and Health Act (OSHA) apply to?
Any person engaged in a business affecting commerce who has employees.
454
List three rights of employees under OSHA.
* Demand safety and health on the job
* Request inspections from OSHA
* File a complaint
455
What are employers required to do under OSHA?
* Display the OSHA poster
* Notify employees exposed to hazardous agents
* Maintain accurate records of work-related deaths and injuries
456
What are the key OSHA standards established in 1974?
* Emergency exit procedures
* Occupational noise exposure
* Machine guarding
* Hazard communications
457
What is the first priority for OSHA inspections?
Imminent danger.
458
True or False: Willful violations of OSHA standards can result in penalties up to $70,000 per violation.
True.
459
What are the goals of workers' compensation laws?
* Provide prompt medical care
* Ensure a no-fault system
* Encourage investment in safety
* Promote research on workplace safety
460
Fill in the blank: To be eligible for workers' compensation, an employee’s injury must have occurred during their _______.
occupation.
461
What is the Drug-Free Workplace Act of 1988?
It requires federal contractors with contracts of $100,000 or more to maintain a drug-free workplace.
462
What is the estimated cost of each fatal work injury according to the National Safety Council?
$1,390,000.
463
What is the main purpose of safety programs in organizations?
To prevent work-related injuries and accidents.
464
List two roles of management in safety programs.
* Set safety goals and policies
* Conduct safety audits or inspections
465
What are some internal influences on workplace accidents?
* Nature of the task
* Management goals
* New or antiquated machinery
466
What are the main objectives for conducting on-site safety inspections?
* Spotlight unsafe conditions
* Eliminate unsafe work practices
* Involve more employees in safety programs
467
What is the purpose of a safety program in an organization?
To help 'sell' safety standards, reevaluate safety standards, compare safety results against plans, gauge training success, and anticipate OSHA inspection problems.
468
What are the internal influences on workplace accidents?
Factors include nature of the task, work group, management goals, organizational style, leader’s style, and machinery age.
469
What are the external influences on workplace accidents?
Factors include economic conditions, labor force composition, geographic location, labor unions, and government regulation.
470
What are human factors influencing workplace accidents?
Employee attitudes, abilities, motivation, skills, preferences, and distractions.
471
What are OSHA’s 'fatal four' causes of workplace fatalities?
* Falls (36%) * Struck by falling objects (10%) * Electrocution (9%) * Caught in/between (2%)
472
What are the steps involved in accident investigation?
Investigate the scene, interview involved parties, complete the report, make recommendations to prevent future accidents, communicate with the employee.
473
What should be prioritized at an accident scene?
* Care for the injured * Protect the accident site * Inform management and authorities * Control crowds and traffic * Gather evidence
474
What is meant by 'safety promotion'?
Designing safety into the workplace, training, and keeping safety messages in front of employees.
475
Fill in the blank: The proper design of the work environment to address physical demands experienced by employees is called _______.
ergonomics
476
What are common components of Employee Assistance Programs (EAPs)?
* Alcohol and drug abuse counseling * Emotional counseling * Family and marital counseling * Legal counseling * Career counseling * Workplace violence counseling * Financial counseling
477
What are the benefits of Employee Assistance Programs?
* Early recognition and intervention * Reduced tardiness and absenteeism * Increased productivity * Reduced accidents from substance abuse * Improved employee morale
478
What are the elements of an employee wellness program?
* First aid and CPR * Flu shots * Health risk appraisals * Health fairs * Exercise/physical fitness * Nutrition education * Stress reduction
479
True or False: Stress costs American businesses over $300 billion annually.
True
480
What are physiological indicators of stress?
* High blood pressure * Disease * Eating disorders * Substance abuse
481
What is employee burnout?
A total depletion of physical and mental resources caused by excessive striving to reach unrealistic work-related goals.
482
What are some symptoms of employee burnout?
* Change of appearance * Increased absenteeism * Signs of depression * Decreased productivity * Withdrawal or listlessness
483
What is Sick Building Syndrome (SBS)?
A situation where building occupants experience health effects linked to time spent in a building without a specific illness being determined.
484
What are potential workplace security measures?
* Adequate lighting * Closed-circuit surveillance * Security guards * Preventive audits * Identification systems
485
What percentage of workplace violence is attributed to customers or clients?
44%
486
What is the formula for violence in the workplace?
Stress + Inappropriate Responses + Opportunity
487
What are common workplace privacy concerns for employers?
* Protection of proprietary information * Confidentiality agreements * Safeguarding company secrets
488
Fill in the blank: The estimated cost of chemical dependency to American businesses is $_______ annually.
532 billion
489
What are the main factors contributing to Sick Building Syndrome?
* Inadequate ventilation * Indoor air pollutants * Outdoor air pollutants * Biological pollutants
490
What is the role of management in addressing workplace depression?
Recognize warning signs, become aware of sources of help, and learn about depression.
491
What are some common causes of workplace violence?
* Stress * Poor management style * Job terminations * Domestic problems
492
What is the significance of zero-tolerance policies in the workplace?
They minimize chances for spur-of-the-moment violent acts.
493
What are the consequences of workplace stress on personal relationships?
54% of workers report work stress affects their life at home.
494
What percentage of employers monitor social media at work?
61%
