Final Exam Review

C H A P T E R 10

1. Turnover (rates): the rate at which employees leave the firm. Voluntary. Costs of turnover

are high. To manage turnover, identify its causes and address them. Food service = HIGH.

Employee reason: salary. Top five employer reasons:

1) Promotion

2) Career development

3) Pay

4) Relationship with supervisor

5) Work-life balance

2. 9 – Box Matrix Method To measure competence, use prior performance, tests or assessment

centers to evaluate promotable employees. Promotion potential.

9-Box Assessment: performance potential is important. 9 Box matrix displays three

levels of current job performance (exceptional, fully per, not yet fully) across and

three levels (eligible for promotion, room for growth in current position, and not

likely to grow) down

3. Retention Talent management issue, best strategies are multifunctional. More likely to leave

if: 1) uninterested in job 2) not suited for job 3) undercompensated. Institute effective and

comprehensive talent management (recruit, select, train, appraise, compensate).

1. Selection. Choose the right worker and also right supervisor.

2. Professional Growth – Training and career development programs help.

3. Provide career direction – Discuss with employees their career preferences.

4. Meaningful work & ownership of goals – clear expectations regarding performance

and what their responsibilities are.

5. Recognition and rewards – employees need and appreciate recognition for a job well

done.

6. Culture and environment – Tense vs. comfortable environment.

7. Promote work life balance – flexible work arrangements, telecommuting.

8. Acknowledge achievements – frequent recognition of accomplishments.

Job Withdrawal: voluntary turnover and poor attendance. Basically any action intended to

place physical or psychological distance between employee & work.

4. Top reasons top performing employees leave 1) Pay

2) Promotional Opportunities

3) Work-life balance

4) Career development

5) Health care benefits

5. IBM On-demand staffing strategy – aims to ensure that its current employees get the

training and coaching they need to play roles in IBMs future. Identifies needed skills, spot

gaps for skills that are in short supply, trains, and assesses its executives, managers, and

regular members. Improves retention.

6. Mentoring: key managerial skill. Focuses on helping employees navigate longer-term career

hazards. Traditionally means having experienced senior people advising, counseling, and

guiding employees’ longer-term career development. May be formal or informal. Effective

mentors set high standards, are willing to invest the time and effort, and actively steer peeps

into important projects, teams, and jobs.

7. Coaching: educating, instructing, and training subordinates. Addresses an employee’s short-

term job skills.

8. The role of a manager in career development: before hiring should give realistic job

interviews. With college graduates, should give challenging first jobs and give an

experienced mentor. After a while, give career-oriented appraisals.

Providing accurate performance feedback!

9. Flex time – plan whereby employees’ workdays are built around a core of midday hours like

11-2pm. Workers determine their own starting and stopping hours.

10. Prior performance – need to measure competence for promotions. Prior performance is a

guide. If they did well before, they’ll do well at the new job.

11. Retaliation – federal and state employment laws contain anti-retaliation provisions. Court

allowed a claim of retaliation when woman gave evidence her employer turned her down for

promotion bc she had accused her previous supervisor of sexual H.

12. Retirement planning – why? Are firms doing this? Why? – Enables employer to retain, in

some capacity, the skills and brain power of those who would normally retire and leave the

firm.

13. Methods used to recruit retirement age workers – institute HR policies that encourage and

support older workers. Offer part-time jobs, hire them as consultants or temp workers, offer

flexible work arrangements, encourage them to work past traditional retirement age,

providing training to upgrade skills and instituting a phased retirement program.

14. How do managers help with engagement? Employee engaged if:

1. Understand how their departments contribute to the company’s success

2. See how their own efforts contribute to achieving the company’s goals

3. Get a sense of accomplishment from working at the firm.

“Say, stay, and strive.” How positive the employee speaks of the organization, who stays

with the company, and do employees take an active role in the overall success of the

company

C H A P T E R 11

15. Performance-based compensation – competency based pay is based on skill.

16. Walsh-Healey Public Contract: sets basic labor standards for employees working on a

government contract that amounts to more than 10K dollars

17. FLSA – who is exempt? contains minimum wage, maximum hours, overtime pay, equal

pay, record keeping, and child labor provisions that are familiar to most working people.

Exemption depends on responsibilities, duties, and salary of an employee. Bona fide

executive, administrative (office managers), and professional employees (architects) are

exempt from the minimum wage and overtime requirements. $455 or less per week, get

overtime. $100K and performing administrative, executive or prof and nothing. If exempt

from minimum, then also overtime. Always exempt overtime: agriculture peeps, taxi

drivers, cinema employees.

Exempt

Lawyers

Medical doctors

Teachers

Pharmacists

Non-exempt

Paralegals

Bookkeepers

Lab technicians

Accounting clerks

18. Employer Retirement Income Security Act (ERISA) 1974. Provided for the creation of

government-run, employer-financed corporations to protect employees against the failure of

their employers’ pension plans. Sets regulations regarding vesting rights. Regulates

portability rights. Prevents dishonesty in pension plan funding.

19. Equity theory – people are strongly motivated to maintain a balance between what they

perceive as their contributions and their rewards. IF a person perceives an inequity, a tension

or drive will develop in their mind and they will be motivated to reduce or eliminate the

tension and perceived inequity.

20. Internal & external equity – Internal refers to how fair the job’s pay rate is when compared

to other jobs within the same company. External refers to how a job0s pay rate in one

company compares to the job’s pay rate in other companies.

21. How do you establish pay rates? The first step? – Time-based pay or performance-pay.

Time-based pay is still the foundation of most employers’ pay plans. Piecework.

22. The Equal Pay Act (1963), an amendment to the FLSA, states that a sex can’t be paid wages

at a lower rate than the opposite sex if they do the same work (equal skills, effort,

responsibility and involves similar working conditions). Seniority or merit system not applied

23. Pay grade – job classification is a simple, widely used job evaluation method in which rater

categorize jobs into groups of roughly the same value for pay purposes. The groups are called

grades if they contain jobs that are similar in difficulty but otherwise different.

24. Wage curve – shows the relationship between the value of the job and the average wage paid

for this job.

25. Pay range – appear as vertical boxes within each grade, showing minimum maximum and

midpoint pay rates for that grade. Different pay for people in same pay grade.

26. Why offer stock options? – Long-term incentive aim to encourage the executive to take

actions that drive up the value of the company’s stock. Generally give the executive the right

to purchase stock at a specific price for a specific period.

C H A P T E R 12

27. What was Frederick Taylor concerned about? – “systematic soldiering.” The tendency of

employees to work at the slowest pace possible and to produce at the minimum acceptable

level.

28. Frederick Herzberg – Motivator Satisfaction (2 factors) Hygiene Dissatisfaction. Best way

to motivate someone is to organize the job so that doing it provides the feedback and

challenge that helps satisfy the person’s higher-level needs for things like accomplishment

and recognition. Satisfying lower-level needs like better pay and working conditions just

keep the person from becoming dissatisfied.

29. Edward Deci – psychologist. His work highlights a potential downside to relying too heavily

on extrinsic rewards: may backfire. Extrinsic rewards could at times actually detract from the

person’s intrinsic motivation

30. Victor Vroom - effort & success; expectancy motivation theory. A person’s motivation to

exert some level of effort depends on three things: 1) person’s expectancy that his effort will

lead to performance 2) instrumentality between successful performance and actually

obtaining the rewards and 3) valence, perceived value person attaches to the reward.

M = (E x I x V)

31. B.F. Skinner – Behavior modification. Changing behavior through rewards or punishments

that are contingent on performance. Behavior that appears to lead to a positive consequence

(reward) tends to be repeated. Behavior that appears to lead to a negative consequence tends

to not be repeated. Managers can get someone to change their behavior by providing the

properly scheduled rewards.

32. FLSA – what is included in overtime? It says employers must pay a rate of 1.5x normal

pay for any hours worked over 40 in a workweek. If employee gets time off, employer must

also computer the number of hours at 1.5x rate.

33. Piecework - oldest and most popular individual incentive plan. Pay the worker a sum (piece

rate) for each unit he or she produces

Straight Piecework – a strict proportionality between results and rewards regardless

of output. Piecework standard: job worth per hour (8$). Engineer determines standard

is 20 leads so piece rate is $8 by 20 or .40c.

Standard Hour – Instead of getting a rate per piece, the worker gets a premium equal

to the percent by which his performance exceeds the standard. Tom’s standard is 160

(at .40 so 64$) and he brings 200 so he’d get extra 25% (40/160 = 25) (.25x64 = 16).

Pros – understandable, appear equitable in principle, can be power incentives.

Cons – Workers may resist justified attempts to raise production standards. No

quality bc workers worried about number of outputs for more money. Resistance for

intro new technology.

34. Merit pay any salary increase awarded to an employee based on his or her individual

performance. Two types:

1. Lump Sum once a year. Doesn’t make the raise part of employee’s salary so it’s

more like a bonus. It’s a more dramatic motivator than a traditional merit raise.

2. Tie awards to individual and organizational performance

35. Recognition programs – nonfinancial reward. Refers to formal programs like employee of

the month programs. Recognition has a positive impact on performance, either alone or in

conjunction with financial rewards.

36. Straight salary – sales: make sense when the main task involves finding new clients or

account servicing. For turnover, too. Makes it easier to switch territories or to reassign

salespeople. Foster sales staff loyalty.

37. Combination salary plans – usually 70/30 base and incentive. Cushions the downside risk

of earning nothing while limiting the risk that the commissions could get out of hand.

38. Stock options – salespeople at high performing companies are twice as likely to receive

stock options as their counterparts at low performing companies are.

39. The Scanlon Plan – an incentive plan developed in 37 by Joseph Scanlon and designed to

encourage cooperation, involvement, and sharing of benefits.

40. Gainsharing – an incentive plan that engages employees in a common effort to achieve

productivity objectives and share the gains. Lincoln, Rucker, and Improshare plans.

C H A P T E R 13

41. Benefits indirect financial and nonfinancial payments employees receive for continuing their

employment with the company

- Indirect financial payment: pay in the form of financial benefits such as insurance

- Nonfinancial payments

42. Benefits covered by federal law – social security, unemployment insurance, workers’

compensation, leaves under FMLA.

43. Supplemental pay benefits – pay for time not worked. Includes holidays, vacations, jury

duty, funeral leave, military duty, personal days, sick leave, sabbatical leave, maternity leave,

and unemployment insurance payments.

44. Unemployment insurance Provides benefits if a person is unable to work through no fault

of his or her own. The benefits derive from a tax on employers

45. FMLA – 1993. States that:

1. Private employers of 50 or more must provide eligible employees up to 12 weeks of

unpaid for serious illness, birth or adoption of child, care of ill child spouse or parent.

2. Employers may require employees to take any unused paid sick leave.

3. Employees taking leave are entitled to receive health benefits while on unpaid leave.

4. Employers must guarantee most employees the right to return to their previous or

equivalent position with no loss of benefits at end of the leave.

GUIDELINES: To be eligible, employee must have worked for a total of 12 months and

have worked for 1,250 or more hours in the past 12 consecutive months. Procedures:

Give no employee a leave until the reason for the leave is clear

If the leave is for medical or family reasons, employer should obtain medical

certification from the medical practitioner

Use a standard form to record both the employee’s expected return date and the fact

that, without an authorized extension, the firm may terminate his employment.

Employers can require independent medical assessments before approving paid

FMLA disability leaves.

46. Workers’ comp – where does the money come from: aims to provide sure, prompt income

and medical benefits to work-related accident victims or their dependents, regardless of fault.

Neither the state nor the federal government contributes any funds for it.

47. What benefits do most employers cover? – Disability, pensions, paid time off, employee

assistance and counseling programs.

48. HMO – Health maintenance organization. A medical organization consisting of specialists

(Surgeons, psychiatrists, etc.) often operating out of a health care center. Provides routine

medical services to employees who pay a nominal fee. “Gatekeeper” doctors must approve

appointments with specialist. HMO receives a fixed annual fee per employee from employer.

49. PPO – Preferred Provider organization. Groups of health care providers that contract with

employers, insurance companies, or third-party payers to provide medical care services at a

reduced fee. PPOs let employees select providers from a relative wide list and see them in

their offices. Providers agree to provide discounts and submit to certain controls

50. COBRA – requires most private employers to continue to make health benefits available to

separated employees and their families for a time. Former employee must pay for the

coverage. Consolidated Omnibus Budget Reconciliation Act.

51. Pregnancy Discrimination Act – employers must treat women applying for pregnancy leave

as they would any other employee requesting a leave under the employer’s policies.

52. The Newborn Mother’s Protection Act of 1996 – prohibits employers’ health plans from

using incentives to encourage employees to leave the hospital after childbirth after less than

the legislatively determined minimum stay.

53. Full retirement age – for non-discounted social security benefits traditionally was 65. Now

67 for those born in 1960s or later.

54. Social Security – where does the money come from? Three types (if insured under Social

Security Act)

1) Retirement benefits provide income when you retire at 62 or after.

2) Death benefits provide monthly payments to your dependents regardless of your age

at death.

3) Disability payments provide monthly payments who become disabled totally if they

meet certain requirements.

55. Pension plan – plans that provide a fixed sum when employees reach a predetermined

retirement age or when they can no longer work due to disability.

56. 401(k) – defined contribution plan. Employee authorizes employer to deduct a sum from his

or her paycheck before taxes, and to invest it in the bundle of investments in his or her 401K.

57. Cafeteria benefit plan – individualized plans allowed by employers to accommodate

employee preferences for benefits. Employer gives each employee a benefits fund budget and

lets the person spend it on the benefits they want with two conditions: 1) employer limits the

total cost for each employee’s benefits package and 2) employee’s benefits plan must include

certain required items (SS, WComp & Unemployment Ins.)

58. Compress workweek – work fewer days each week but each day they work longer hours.

Hospitals or airline pilots.

C H A P T E R 14

59. Ethics – the principles of conduct governing an individual or a group; specifically, the

standards you use to decide what your conduct should be.

60. Sarbanes – Oxley Act: inject a higher level of responsibility into executives’ and board

members’ decisions. Makes them personally liable for violating their responsibilities to their

shareholders.

61. Non-punitive discipline. Should be effective (discourage unwanted behavior) and fair.

1) Rules and Regulation – address issues such as theft, drinking, insubordination. Rules

inform employees ahead of time what is and isn’t acceptable. Employee handbook.

i. Poor performance is not acceptable.

ii. Alcohol and drugs have no place at work.

2) Progressive Penalties – penalties range from oral warnings to written warnings to

suspension to discharge. Severity of the penalty usually reflects the type of offense

and the number of times it has occurred. (ie: unexcused lateness).

3) Formal Disciplinary Appeals Process – all union agreements contain this, but not

only unions. 1) Management review, the complainant submits a written complaint to a

member of management 2) Office complaint, complainant submits a written appeal to

the VP or SVP of the division and 2) Executive appeals Review, complainant may

submit a written complain within 7 days of step 2 to the employee relations dpmt.

Appeals board then reviews all relevant info and makes decision to uphold, overturn,

etc.

62. Four main types of employee privacy violations: 1) intrusion 2) publication of private

matters 3) disclosure of medical records 4) appropriation of an employee0s name or likeness

for commercial purposes.

63. Dismissal – most drastic disciplinary step. There should be sufficient cause for the dismissal

and (as a rule) you should only dismiss someone after taking reasonable steps to rehabilitate

the employee. EEO and other laws limit mgmt’s right to dismiss.

64. Termination at will – without a contract, either the employer or the employee could

terminate at will the employment relationship. The employee can resign for any reason and

the employer can dismiss an employee for any reason.

65. Insubordination – form of misconduct. Refers to disobedience or rebelliousness.

66. Exit interview – interviews usually conducted by a HR professional prior to the employee

leaving. Elicits information about the job or employer with the aim of giving employers

insights into what is right or wrong about their companies.

67. Seniority – ultimate determinant of who will work. Can give way to merit or ability but

usually only when no senior employee is qualified for a particular job. Based on the date the

employee joined the organization not the date they took a particular job.

68. Social bullying – spreading rumors, leaving people out on purpose, breaking up friendships.

C H A P T E R 15

69. Unions – about 14.7 million US workers (11.9%). Transportation and public utilities, 26% of

employees are union members. Most union members are in the public sector.

70. “Closed shop” – company can hire only current union members. Outlawed in 47.

71. Union shop – company can hire nonunion people, but they must join the union after a

prescribed period and pay dues. If not, they can be fired.

72. Preferential Shop – union members get preference in hiring, but the employer can still hire

nonunion members.

73. Right to work – state statutory or constitutional provisions banning the requirement of union

membership as a condition of employment. Don’t outlaw unions but outlaw any form of

union security.

74. AFL-CIO – American Federation of Labor and Congress of Industrial Organizations. A

voluntary federation of about 56 national and international labor unions in the US. Merged in

1955. 3 layers: 1) local chapter, 2) national union 3) national federation (AFC-CIO).

75. “Yellow dog” contract – management could require nonunion membership as a condition

for employment.

76. Norris-LaGuardia Act – 1932. It guaranteed to each employee the right to bargain

collectively “free from interference, restraint, or coercion.” Declared yellow dog contracts

unenforceable.

77. National Labor Relations Board – The agency created by the Wagner Act to investigate

unfair labor practice charges and to provide for secret-ballot elections and majority rule in

determining whether or not a firm’s employees want a union.

78. Taft-Hartley Act – Prohibited unfair union labor practices and enumerated the rights of

employees as union members. It also enumerated the rights of employees. Aka: Labor

Management Relations act. Strikes.

79. Landrum-Griffin Act – 1959. Aimed at protecting union members from possible

wrongdoing on the part of their unions. Aka: labor management reporting & disclosure act.

80. The steps in the union drive process:

1) Initial Contact – union determines the employees’ interest in organizing, and

establishes an organizing committee.

2) Obtaining Authorization Cards

3) Hold a Hearing – 1) if employer doesn’t contest union recognition at all, no hearing

is needed. 2) if employer doesn’t contest union right to an election, no hearing needed

3) if an employer does contest the union, it can insist on a hearing.

4) The Campaign – precedes election. Union and employer appeal to employees for their

votes.

5) The Election – 30-60 days after NLRB issues its Decision & Direction of Election.

It’s by secret ballot. NLRB provides booths, counts votes, certifies results.

81. Union authorization cards – for the union to petition the NLRB for the right to hold an

election, they must get cards. Authorize the union to seek a representation election and state

that the employee has applied to join the union

82. Decertification – legal process for employees to terminate a union’s right to represent them.

83. Collective bargaining – The process through which representatives of management and the

union meet to negotiate a labor agreement.

84. Severance pay – a one-time payment some employers provide when terminating an

employee.

85. Picketing – having employees carry signs announcing their concerns near the employer’s

place of business. One of first activities of strikes. Purpose is to inform the public about the

existence of the labor dispute and often encourage others to refrain from doing business with

the employer.

86. What are some of the things unions negotiate? Union security and improved wages, hours,

working conditions, and benefits. For security:

1. Agency shop – employees who don’t belong to the union still must pay the union an

amount equal to union dues (if union efforts benefits all employees)

2. Maintenance of membership arrangement – employees do not have to belong to the

union but union members employed must maintain membership in the union for the

contract period.

Improved things: labor agreement also gives the union a role in other HR activities like

recruiting, selecting compensating, promoting, training, and discharging employees.

C H A P T ER 16

87. US Dept. of Labor – enforces the standards set by OSHA.

88. Supervisor’s role in safety – safety inspections should be part of the supervisor’s daily

routine. “Daily walk-through of your workplace.” Use a checklist of unsafe conditions.

89. Occupational Safety and Health Adm. – created by the Occupational Safety & Health Act

of 1970, OSHA’s basic purpose is to administer the act and to set and enforce the safety and

health standards that apply to almost all workers in the United States. Ensures compliance.

Workers with 11 or more employees must maintain records of and report certain

occupational injuries and occupational illnesses. Inspection in 24 hours.

90. Occupational Illness – any abnormal condition or disorder caused by exposure to

environmental factors associated with employment like acute and chronic illnesses caused by

inhalation, absorption, ingestion, or direct contact with harmful substances.

91. Workplace accidents – chance occurrences (out of mgmt. control), unsafe conditions, and

employees’ unsafe acts. Unsafe conditions is #1.

92. Industrial accidents – 1/3 of these accidents occur around forklift trucks, wheelbarrows, and

other handling and lifting areas. Occur by metal and woodworking machines and saws, or

around transmission machinery like gears, pulleys, and flywheels.

93. What does a chief safety officer do? Responsible for accident prevention by 1) reducing

unsafe conditions and 2) reducing unsafe acts.

94. Reducing workplace accidents – reduce conditions and acts through the following:

Selection and placement

training

Motivation: posters, incentives, and positive reinforcements.

Behavior-based safety

Employee participation.

Conducting safety and health audits and inspections

95. Industrial hygiene – managing exposures to hazardous substances and limiting them to 600

chemicals. Involves recognition (possible exposure hazards), evaluation (determining how

severe it is), and control (eliminating or reducing the hazard).

96. What are occupational respiratory diseases? – Disease bc exposed to asbestos, silica, lead,

and carbon dioxide.

97. Exposure limits according to OSHA – 600 chemicals.

98. Infectious disease – To stop them from spreading:

1. Closely monitor CDC travel alerts about health concerns.

2. Provide daily medical screening for employees returning from infected areas.

3. Deny access to your facility for 10 days to employees or visitors from a.a.

4. Tell employees to stay at home if they have a fever or respiratory system symptoms

5. Clean work areas and surfaces regularly

6. Stagger breaks. Offer several lunch periods to reduce overcrowding

7. Emphasize the importance of frequent hand washing and make hand sanitizers avail.

99. Cautious job behavior -

100. Stress – workplace factors can lead to it like work schedule, pace of work, job security,

route to and from work, workplace noise, poor supervision. May lead to alcoholism and drug

abuse. Causes anxiety, depression, anger, cardiovascular disease, headaches, accidents, and

even early Alzheimer’s. Diminished performance, absenteeism, and turnover.

101. Workplace smoking – Employers: higher health costs and fire insurance costs, increased

absenteeism, and reduced productivity. Wellness programs for employees.

102. Causes for workplace injuries?

C H A P T E R 17

103. Geert Hofstede – his study illustrates that societies differ on five values:

1. Power distance – extent to which the less powerful members of institutions

accept and expect and unequal distribution of power

2. Individualism

3. “Masculinity”

4. Uncertainty avoidance

5. Long-term orientation.

104. Chinese managers – concerned about maintaining a harmonious environment.

105. Mexico-Managers and subordinates – high acceptance of unequal power distribution.

106. Hourly wages in production for other countries –

Mexico: $2.92

Taiwan: $6.58

USA: $24.59

UK: $29.73

Germany: $37.66

107. Work councils -

108. Ethics for international firms – establish global standards for adhering to US laws that

have cross-border impacts. Create and distribute a global code of conduct.

109. What is the European Union? – separate countries of the former European Community

who unified into a common market for goods, services, capital and even labor. Tariffs bye.

110. Recruiting for China – difficult to recruit, hire and retain good employees. Employers

must report names, sexes, identification numbers, and contract terms for all employees they

hire within 30 days of hire. Employees are career oriented.

111. Local – citizens of the countries where they are working

112. Expatriate – noncitizens of the countries in which they are working

113. Third party national – citizens of a country other than the parent or the host country.

114. Home country national – citizens of the country in which the multinational company

has its headquarters.

115. Offshoring – having local employees abroad do jobs that the firm’s domestic employees

previously did in-house.

116. Polycentric – a conscious belief that only the host-country managers can ever really

understand the culture and behavior of the host-country market.

117. Ethnocentric – the notion that home-country attitudes, management style, knowledge,

evaluation criteria, and managers are superior to anything the host country has to offer.

118. Cross-cultural – y’know…

119. Balance Sheet – each expatriate should enjoy the same standard of living he or she

would have had at home. Addresses 4 groups of expenses (income taxes, housing, goods and

services, and discretionary expenses like car payments). The employer estimates each of

these expenses in the expat’s home country and in the host country. Employer then pays any

differences such as additional income taxes or housing expenses.

S H O R T E S S A Y T O P I C S:

1. UNIONS, ADVANTAGES AND DISADVANTAGES, WHY DO PEOPLE JOIN? Unions are a big part of the labor movement. Around 11.9% of the total workforce

belongs to unions. Workers join unions for various reasons. For example, they may look for

union security in order to fight unfairness in the workplace as well as look for improved wages,

hours, and working conditions.

Some of the advantages of joining a union is that members do generally get a greater

number or improved holidays, sick leave, unpaid leave, benefits with insurance, etc.They also

help reduce the impact of downsizings and wage cuts in most industries. They do this through

collective bargaining – the process through which representatives of management and the union

meet to negotiate a labor agreement.

However, unions do also have a disadvantage. If they begin to strike due to an impasse in

collective bargaining (when one party is demanding more than the other will offer), then

employer can look to replace strikers with permanent replacement workers.

2. MERIT PAY, GOOD? BAD? WHY? WHY NOT? Merit pay is any salary increase to employees based on his or her individual performance.

Unlike a bonus, it usually becomes a part of the employee’s base salary. Merit pays, overall,

seem like a good idea for an employer to include in their organization. Oftentimes, employees

are satisfied by doing the minimum required to accomplish tasks and therefore don’t help the

organization develop and succeed.

Merit pay would influence employees to put more effort in their work in order to gain

that raise in salary. Although some might do it for the money, it would still benefit the

organization as a whole since the employee would be more efficient, focused, and driven. It

compares to a salesperson having a commission as part of their salary rather than just a straight

salary. This incentive to do well is tied to performance because the better they perform, the more

they will earn – which is like merit pay.

3. EXEMPT / NONEXEMPT FLSA contains minimum wage, maximum hours, overtime pay, equal pay, record

keeping, and child labor provisions that are familiar to most working people. Exemption depends

on responsibilities, duties, and salary of an employee. Bona fide executive, administrative (office

managers), and professional employees (architects) are exempt from the minimum wage and

overtime requirements. $455 or less per week, get overtime. $100K and performing

administrative, executive or prof and nothing. If exempt from minimum, then also overtime.

Employers must pay a rate of 1.5x normal pay for any hours worked over 40 in a

workweek. If employee gets time off, employer must also computer the number of hours at 1.5x

rate.

Always exempt overtime: agriculture peeps, taxi drivers, cinema employees.

Exempt

Lawyers

Medical doctors

Teachers

Pharmacists

Non-exempt

Paralegals

Bookkeepers

Lab technicians

Accounting clerks

4. INCENTIVE PLANS. WHY DO THEY FAIL? There are many incentive plans which can help an employee increase performance and

help the organization like piecework plans, merit pay, dual career ladders, etc. However, many

times incentive plans can be unsuccessful for many reasons.

First, if there is no clear relationship between employee effort and quantity or quality of

output, then incentives will not work. Plans can also lack complete standards which can make the

incentives fail. Next, if an incentive is not motivational, then it will not succeed because the

employees would not strive to obtain the reward which relates to Vroom’s motivation

expectation theory. If a reward has no valence to an employee, it won’t work.

Also, incentive plans can fail if the incentives incentivize the wrong behavior like

increasing production but forgetting about quality. Finally, many plans fail because they may

focus too much on money instead of recognition which an employee seeks.

5. UNEMPLOYMENT INSURANCE Unemployment insurance provides benefits if a person is unable to work through some

fault other than his or her own. The benefits derive from a tax on employers on their taxable

payroll. Different states have different unemployment laws, but they all follow similar

guidelines.

Unemployment insurance isn’t paid to everyone who leaves a job. It must only apply to

those who leave through no fault of their own. Therefore, someone who was fired for being late

often wouldn’t be applicable for unemployment insurance.

In order to protect themselves, employers should keep a list of written warnings issued to

an employee so, if fired, they can deny this type of insurance. Examples of things to write down

could be keeping documented an employee’s lateness and absences or also document poor

performance.

6. FMLA (FAMILY AND MEDICAL LEAVE ACT) – 1993. States that:

1. Private employers of 50 or more must provide eligible employees up to 12 weeks of

unpaid for serious illness, birth or adoption of child, care of ill child spouse or parent.

2. Employers may require employees to take any unused paid sick leave.

3. Employees taking leave are entitled to receive health benefits while on unpaid leave.

4. Employers must guarantee most employees the right to return to their previous or

equivalent position with no loss of benefits at end of the leave.

GUIDELINES: To be eligible, employee must have worked for a total of 12 months and have

worked for 1,250 or more hours in the past 12 consecutive months. Procedures:

Give no employee a leave until the reason for the leave is clear

If the leave is for medical or family reasons, employer should obtain medical

certification from the medical practitioner

Use a standard form to record both the employee’s expected return date and the fact

that, without an authorized extension, the firm may terminate his employment.

Employers can require independent medical assessments before approving paid

FMLA disability leaves.

7. MANAGING DISMISSALS PROPERLY To avoid problems, dismissals should only occur after taking reasonable steps to help an

employee improve their performance or errors. Termination at will is when the employer can fire

at will an employee without necessarily having a reason, but dismissals should be due to bad

performance, misconduct, lack of qualifications for the job, or elimination of the job.

Unsatisfactory performance means not carrying out the duties correctly or meeting job

standards and usually includes being late or being absent often. Misconduct is violating the rules

as well as stealing or insubordination which is disobedience of the boss’s authority or orders.

Lack of qualifications for the job is the employee not being able to do the assigned tasks

even if they try. Sometimes, an organization may have to downsize and eliminate positions. If

they cannot allocate the employee to another position or section, then a dismissal should tell the

employee they are eligible for unemployment insurance and maybe a severance pay.