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intrinsic and extrinsic rewards
employees critical psychological states that result from performing their jobs
monetary and non-monetary rewards
non monetary items such as insurance, retirement plans, etc.
base pay (fixed) and incentives (variable)
What are the two forms of direct compensation?
wages and salary
What are the 2 types of base/fixed pay?
What are examples of incentives/variable pay?
pay for time not worked,
What are the 4 types of indirect compensation?
What are examples of pay for time not worked?
What are examples of insurance plans?
What are examples of security plans?
What are examples of employee services
competitive business strategy
planned use of company resources to promote and sustain a competitive advantage
human resource strategy
use of HR practices to reinforce competitive business strategy
the design and implementation of compensation systems to reinforce the objectives of both HR strategies and competitive business strategies
the lowest cost producer in a market with focus on efficiency
a unique product at a premium price This strategy relies on employee creativity and willingness to take risks and requires longer time frames
Why does brand loyalty and research and development frequently go hand in hand with differentiation?
design and implementation
Competitive professionals support strategic initiatives through the ____ and ____ of compensation systems
reducing cost per employee
for a lowest-cost strategy, compensation professionals should focus on what?
pay for differentiation differs because this strategy relies on employee creativity and willingness to take what?
differentiation strategies require longer what?
What is the heart of compensation?
1. employee's skill level
2. employee's effort
3. employee's level of responsibility
4. severity of the working conditions
What are the 4 compensable factors for compensation?
COLAs (cost of living adjustments)
adjustments for inflation and enables workers to maintain standard of living
Differentiation (tesla, apple)
this strategy relies on employee creativity and willingness to take risks and requires longer time frames
reward for length of service
human capital theory
states that employees' knowledge and skills add value and are more productive over time
What theory is seniority pay based on?
rewards employee performance (added on to hourly wage)
pay that fluctuates on a predetermined outcome
managerial, service, professional
what type of workers are likely to receive pay-for-knowledge pay?
What type of workers are likely to receive skill-based pay?
employer chooses to give benefits such as action or paid leave
Legally Required Benefits
benefits mandated by law such as social security and workers compensation
from small groups to factories
In the industrial revolution, it changed the division of labor work from who to what
productivity measures and piecework plans (increase output)
What 2 concepts were formed from scientific management?
improving conditions for employees and personal management
What 2 things emerged from welfare practices and governmental regulation
because of a pressure of globalized competition, employees were viewed as a source of what?
internally consistent compensation systems
employees in more complex jobs are paid more than employees in jobs that require fewer qualifications and less complex duties; clearly defines relative value of each job in an organization
important to perceptions of fairness
why is internal consistency in compensation important?
job analysis and job evaluation
What are 2 processes to achieve internal consistency?
The systematic process of gathering and interpreting information about the job; job description
determines relative worth of jobs to organization and establishes pay differentials accordingly
how is market competitiveness in compensation achieved?
pay for data from competitors
recruit and retain employees
why does market competitiveness in compensation matter?
represent pay rate differences for jobs of unequal worth and the framework for recognizing differences in employee contributions
groups of similar jobs for pay policy application
minimum, maximum, midpoint of pay grades
employees, line managers, executives, unions, U.S. government
What stakeholders must a compensation system satisfy?
paid time off
gives employees pay for time when they are not working
Enhancements like tuition reimbursement or daycare assistance to employees and their families
why might satisfying various stakeholders be a challenge for HR departments? (END OF CH 1)
maintain balance of power between employees and organizations
why are employment and labor relations laws needed?
Industry Wage Differentials
pattern of pay and benefits associated with an industry
extent to which a company uses large scale equipment
higher capital intensity tend to pay higher wages
How does capital intensity influence wages?
unionized industries tend to pay higher wages than non or lesser-unionized industries
what effect does unionization tend to have on pay?
knowledge, skills, and abilities
what are KSAs?
more complex KSAs receive higher pay
How do KSAs affect pay?
to restore equality bargaining power between employees and employers
What was the purpose of the National Labor Relations Act (NLRA)?
Collective Bargaining Agreement (CBA)
written document containing terms agreed upon by employees and management
pay, work hours, conditions of employment
What are some topics CBA includes
occurs when non-unionized companies offer similar benefits to unionized company to keep employees from joining union
right to work laws
prohibit management and union from making union membership a term of employment
the Great Depression
what major event in history led, in part, to the passage of income continuity, safety, and work hours legislation
1. minimum wage
3. child labor
what three broad issues did the fair labor standards act (FLSA) address?
overtime and minimum wage does not apply
overtime and minimum wage do apply
What are six categories of exemption from the FLSA
what does the portal-to-portal act define
equal pay act
men and women should receive for equal pay for equal work, skill, effort, responsibility, and under similar working conditions
skill, effort, responsibility, and working conditions
what are compensable factors
2. merit pay
3. quantity or quality of work
4. any factor other than sex
What are the 4 exceptions to equal pay?
what 5 protected classes fall under the civil rights act of 1964?
intentional mistreatment of workers based on their being in one of the protected classes
unintentional discrimination or unequal treatment of protected groups
What is used to determine disparate impact?
ADEA (Age Discrimination in Employment Act)
protects those 40+ from age discrimination, protects pay and benefits
burden of proof shifts to the employees to the employer
how did the civil rights act of 1991 change the burden of proof? US citizens working overseas may file suit against U.S. businesses for discriminatory employment practices
pregnancy discrimination act of 1978 (PDA)
what act protects the following rights: same sick leave as temporary disability and protects accrued retirement, benefits, and seniority.
discrimination against individuals with mental/physical disabilities
What does the Americans with disabilities act prohibit