Research on the effects of two-tier wage plans found
Jobstructures
·
consists of the
relative pay for different jobs within the organization
pay level
·
average amount the
organization pays for a particular job
pay structure
·
the pay policy
resulting from job structure and pay-level decisions
Comparable worth
·
uses job evaluation to
establish worth of an organization's jobs in terms of such criteria as their
difficulty and their importance to the organization
What law establishes
minimum wage?
·
Fair Labor Standards
Act
What is the national
minimum wage?
·
7.25
Exempt employees
·
Managers, outside
salespeople, and any other employees not covered by the FLSA requirement for
overtime pay.
Who is not eligible
for overtime pay?
·
executive,
professional, administrative ,and highly compensated white-collar employees
David-Bacon Act and
Walsh Healy Public Contracts Act
·
govern pay policies of
federal contractors. federal contractors must pay their employees at rates at
least equal to the prevailing wages in the area
Product market
·
organizations that
offer competing goods and services
Benchmarking
·
a process by which a
company compares its performance with that of high-performing organizations
Who is the primary
collector of pay survey data in the U.S.
·
U..S Bureau of Labor
Statistics
job evaluation
·
An administrative
procedure for measuring the relative internal worth of the organization's jobs.
piecework rate
·
rate of pay per unit
produced
Pay policy line
·
A graphed line showing
the mathematical relationship between job evaluation points and pay rates
Pay grades
·
Set of jobs having
similar worth or content
Pay range
·
a set of possible pay
rates defined by a minimum, maximum, and midpoint of pay for employees holding
a particular job or a job within a particular pay grade
Pay differentials
·
adjustment to a pay
rate to reflect differences in working conditions or labor markets
delayering
·
Reducing the number of
levels in the organization's job structure
Skill-Based Pay
Systems
·
pay structures that
set pay according to the employees' levels of skill or knowledge and what they
are capable of doing
Compa-ratio
·
ratio of average pay
to the midpoint of the pay range
Which of the following
sentences best describes a situation that comparable-worth policies were
designed to address?
·
In a city government,
positions mostly held by women pay less than positions mostly held by men.
In a city government,
positions mostly held by women pay less than positions mostly held by men.
·
A rising cost of
living will lead workers in the labor market to seek higher pay.
Mark and Chloe hold
the same position at Rue & West Bros. However, Mark earns more than Chloe.
Which of the following will justify the organization's decision to pay Mark
more than Chloe?
·
Mark meets higher
productivity targets than Chloe.
Which of the following
statements is true about the Fair Labor Standards Act (FLSA)?
·
Nonexempt employees
are covered by FLSA and include most hourly workers.
Thomas and Alex are
welders working for two different divisions of the same company. Both have the
same level of experience. However, Thomas earns more than Alex. Under the Fair
Labor Standards Act (FLSA), which of the following will justify the organization's
decision to pay Thomas more than Alex?
·
Thomas lives in a
location where living expenses are higher
Instruck Inc. is a
real estate firm based in Colorado. The company ensures that employees' pay is
dependent on what they are capable of doing. The company also supports efforts
to empower its employees by encouraging them to be independent and to make
decisions in various areas. This, in turn, ensures job enrichment. Based on
this information, identify the pay structure being utilized by Instruck.
·
skill-based pay
systems
Research on the
effects of two-tier wage plans found that
·
lower-paid employees
were more satisfied on average than higher-paid employees because they made
comparisons with lower-paying alternatives for themselves.
Which of the following
statements is true about a product market?
·
Organizations in a
product market are competing to serve the same customers.
Perlis Inc. is a
whole-foods distributor. Its human resource department gathers the following
data for computing compa-ratios of some positions. Based on the data, for which
position is Perlis most likely underpaying for human resources?
·
inventory clerks:
average salary of $20,000, range midpoint of $30,000 Correct
Teno Industries Inc.
is a manufacturing company based in Texas. In the year after Teno Industries
implemented a comparable-worth policy, its expenses increased, and as a result,
profits declined. What difficulty of comparable-worth policies does this
example illustrate?
·
The employer is at an
economic disadvantage because of increased pay for some jobs.
Cliff Stiff Inc., a
cement company, receives more than $2,000 in federal money. The company hires
employees belonging to the age group of 25 to 40. Soon after, the Cliff Stiff
is charged for violation of law under the Davis-Bacon Act of 1931 and the
Walsh-Healy Public Contracts Act of 1936. Which of the following would most
likely explain the reason for the company being sued?
·
The employees of the
company are not being paid at rates at least equal to the prevailing wages in
the area.
Organizations under
pressure to cut labor costs may respond by
·
postponing hiring
decisions.
David earns a base
rate of $12 an hour and receives a weekly attendance award of $20. He works 40
hours this week. What would be his total compensation for the week?
·
$500
Das Work and Edge Tech
are electronics manufacturing companies competing to serve the same customers.
The labor-related expense per product for Das Work is $30 higher than that for
Edge Tech. However, Das Work makes more profits than Edge Tech. In this case,
which of the following actions has contributed to the profits made by Das Work?
·
It produces high
quality goods and charges more for these products than competitors.
Which of the following
is a drawback of setting pay rates based strictly on a pay policy line?
·
The estimated pay for
a job may not reflect conditions in the labor market.
Caroline, a
researcher, believes that an organization needs to plan what they will pay
employees in each job. Mark, her colleague, argues that an employee's pay
should be independently negotiated. Which of the following statements will
weaken Mark's argument?
·
An unplanned approach
will likely result in unfairness and dissatisfaction among the employees.
Cindy and Alex execute
the same roles and responsibilities at their organization. However, Alex earns
more than Cindy. Under the laws governing equal employment opportunity, which
of the following statements will justify the organization's decision to pay
Alex more than Cindy?
·
Alex has more
experience than Cindy.
Which of the following
is a disadvantage of a pay structure that rewards employees for winning
promotions?
·
It discourages
employees from gaining valuable experience through lateral career moves.
Executive pay has
drawn public scrutiny in recent years. Which of the following statements best
explains the reason?
·
Top executives' pay is
much higher than average workers' pay.
Which of the following
is a drawback of a comparable-worth policy?
·
Raising pay for some
jobs places the employer at a disadvantage relative to employers that pay the
market rate.