HRM Final Exam

Piecework rates

Wage based on the amount the worker produces.

Standard hour plans

An incentive plan that pays workers extra for work done in less than a preset 'standard time'.

Merit pay

A system of linking pay increases to ratings on a performance scale, they make use of a merit increase grid.

Individual bonuses

Reward individual performance.

Sales performance bonuses

Performance bonuses that are not rolled into base pay; the employee must earn them during each performance period.

Sales commissions

Incentive pay calculated as a percentage of sales.

Straight commission plan

Some salespeople earn only commissions; some salespeople earn no commissions at all.

Gain sharing

Group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each to employees.

Scanlon Plan

A gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard.

Rucker Plan

Labor cost divided by value added.

Improshare

Actual hours worked divided by total standard value hours.

Team award

Similar to group bonuses but are more likely to use a broad range of performance measures.

Profit Sharing

Incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.

Advantages of Profit Sharing

Encourages employees to think like owners and is less costly when the organization is experiencing financial difficulties.

Major Weakness of Profit Sharing

'Line of light' - Most employees have low influence on overall company profit.

Annual payout issues

Annual payout not as effective as more frequent payouts.

Team incentives

Support group planning and problem solving, thereby building a team culture.

Team bonuses

Tend to reduce competition among individuals.

Free rider effect

Individual team members may perceive that 'their' efforts contribute little to team success or to the attainment of the incentive bonus.

Sucker effect

Competition may prevent necessary cooperation among groups.

Complex payout formulas

Can be difficult for team members to understand.

Stock Options

Rights to buy a certain number of shares of stock at a specified price.

Employee Stock Ownership Plan (ESOP)

An arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust.

Balanced Scorecard

A combination of performance measures directed toward company's long and short term goals and used as the basis for awarding incentive pay.

Participation in decision making

Employee participation in pay-related decisions can be part of a general move toward employee empowerment.

Communication

Demonstrates to employees that the pay plan is fair.

Social Security

The federal Old Age, Survivors, Disability, and Health Insurance (OASDHI) program.

Unemployment Insurance

A federally mandated program administered by the states focusing on minimizing the hardships of unemployment.

Conditions for Unemployment Benefits

To receive benefits, workers must meet four conditions: 1. They meet requirements demonstrating they had been employed. 2. They are available for work. 3. They are actively seeking work. 4. They were not discharged for cause, did not quit voluntarily and are not out of work because of a labor dispute.

Benefits Required by Law

Certain benefits that employers are legally required to provide.

Employee Benefits

Compensation provided to employees beyond direct pay.

Incentive Pay

Compensation that is tied to performance or achievement of specific goals.

Employee Empowerment

A management practice that involves giving employees more control over their work and decision-making.

Creative Benefits Packages

Unique combinations of employee benefits that help attract and retain talent.

Insurance Programs

Benefits that provide financial protection against various risks, often offered at a better rate to employers.

Tax Laws and Benefits

Regulations that make certain employee benefits more favorable from a tax perspective.

Long-term Goals

Objectives that an organization aims to achieve over an extended period.

Short-term Goals

Objectives that an organization aims to achieve in the near future.

Performance Measures

Metrics used to assess the effectiveness of an organization's strategies.

Incentives to Stabilize Employment

Programs designed to encourage employers to maintain their workforce during economic downturns.

Trust in Employee Ownership

A legal entity that holds assets for the benefit of employees in an ESOP.

Eligibility for Stock Options

The criteria that determine which employees can receive stock options.

Workers' Compensation Insurance

State programs that provide benefits to workers who suffer work-related injuries or illnesses, or to their survivors.

No-fault liability

An employee does not need to show that the employer was grossly negligent in order to receive compensation.

Family and Medical Leave

FMLA of 1993 requires organizations with 50 or more employees to provide up to 12 weeks of unpaid leave.

Paid Leave (BR)

Paid Time Off (PTO) Bank - Most flexible approach, employer pools personal days, sick days, and vacation days for employees to use as the need arises.

Medical Insurance

Typically covers hospital and surgical expenses as well as visits to physicians, additional coverage may include dental and vision care, birthing centers, and prescription drug programs.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Federal law that requires employers to permit employees or their dependents to extend their health insurance coverage at group rates for up to 36 months following a qualifying event.

Life Insurance

Employers may provide life insurance to employees or offer the opportunity to buy coverage at low group rates.

Term life insurance

If the employee dies during the term of the policy, the employee's beneficiaries receive a death benefit payment.

Disability Insurance

Insurance that pays a percentage of a disabled employee's salary as benefits to the employee.

Short term disability insurance

Insurance that pays a percentage of a disabled employee's salary as benefits to the employee for six months or less.

Long term disability insurance

Insurance that pays a percentage of a disabled employee's salary after an initial period and potentially for the rest of the employee's life.

Long-Term Care Insurance

Policies provide benefits toward the cost of long-term care and related medical expenses (nursing home or assisted living facilities).

Retirement Plans (DE)

About half of employees working in the private business sector have employer-sponsored retirement plans.

Contributory plan

Retirement plan funded by contributions from the employer and employee.

Noncontributory plan

Retirement plan funded entirely by contributions from the employer.

Defined benefit plan

Pension plan that guarantees a specified level of retirement income.

Defined contribution plan

Retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into that account.

Cash balance plan

Retirement plan in which the employer sets up an individual account for each employee and contributes a percentage of the employee's salary.

Family-Friendly Benefits (BR)

Benefits such as Family Leave, Child Care Benefits, College Savings Plans, and Elder Care.

Cafeteria-Style Plans

These plans offer employees a set of alternatives from which they can choose the types and amounts of benefits they want.

Legal Requirements For Employee Benefits (BR)

Benefits required by law, tax treatment of benefits, anti-discrimination laws, and accounting requirements.

Communicating Employee Benefits

Organizations must communicate benefits information to employees so that they will appreciate the value of their benefits.

Unions

Organizations formed for the purpose of representing their members' interests in dealing with employers.

Labor Relations

A field that emphasizes skills managers and union leaders can use to minimize costly forms of conflict and seek win-win solutions to disagreements.

Efficiency

Productive use of scarce resources for economic prosperity.

Equity

The provision of fair labor standards for both material outcomes and personal treatment.

Voice

The ability of employees to have meaningful input into workplace decisions.

Unionized companies

Typically have lower turnover rates.

Unionized workers

Are no more, or less likely to be satisfied in their job once working conditions and climate are taken into consideration.

Effects of unions on job productivity

There is mixed evidence; unionized firms are generally less profitable.

Management Goals

Increase the organization's profits/performance, restrain costs and improve output, keep the organization's operation flexible.

Union goals

Obtain pay and working conditions that satisfy their members, give members a voice in decisions that affect them, ensure union survival and security.

Societal Goals

Ensure that workers have a voice in how they are treated by their employers, drive the laws and regulations that affect labor unions.

National Labor Relations Act (NLRA) of 1935

Addresses unfair practices by employers.

Taft-Hartley Act of 1947

Imposes restrictions on union practices.

Landrum-Griffin Act of 1959

Regulates unions' actions regarding their members, including financial disclosure and elections.

Right-to-work laws

State laws that make union shops, maintenance of membership, and agency shops illegal.

National Labor Relations Board

Federal government agency that enforces the NLRA by conducting and certifying representation elections and investigating unfair labor practices.

Union organizing process

Includes signing authorization cards, petition for election, election campaign, election and certification.

Union decertification

Made possible by the Taft-Hartley Act, allowing employees to decertify a union.

Decertification procedure

Requires at least 30% to petition for election, petition submitted 60-90 days prior to expiration of current contract.

Collective bargaining

Negotiation between union representatives and management representatives to arrive at an agreement defining conditions of employment.

Distributive bargaining

A type of negotiation that focuses on dividing a fixed amount of resources.

Integrative (mutual-gains) bargaining

A negotiation strategy that seeks win-win outcomes.

Attitudinal structuring

Refers to the process of shaping the relationship between the parties involved in negotiation.

Intraorganizational bargaining

Negotiation that occurs within an organization, typically among different factions.

Strikes

A collective decision by union members not to work until certain demands or conditions are met.

Meditation

Conflict resolution procedure in which a mediator facilitates negotiation but has no formal authority to dictate a decision.

Fact Finder

A third party in collective bargaining who reports on the reasons for a dispute and may recommend a settlement.

Arbitration

Conflict resolution procedure in which an arbitrator determines a binding settlement.

Contract administration

Involves employee-initiated grievances.

Labor-Management Cooperation

Features employee involvement in decision making, self-managing teams, problem-solving teams, and sharing of financial gains.

Home country/Parent country

Country in which an organization's headquarters is located

Host country

Country (other than the home country) in which an organization operates a facility

Third country

Neither home nor the host country of an employer

Expatriates

Employees assigned to work in another country

Culture

Most important influence on international HRM is the culture of the country in which a facility is located

Education and Skill Levels

Countries differ in the degree to which their labor markets include people with education and skills of value to employers