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MGMT 2103 Exam #1
Pay Structure Decisions
Terms in this set (15)
focus on what employees in other organizations are paid for doing the same general job
Influence the decisions of applicants to accept job offers as well as the attitudes and decisions of employees about whether to stay with the organization or take the job elsewhere
focus on what employees within the same organization, but in different jobs , are paid
Employees make comparisons with lower-level jobs, jobs at the same level, and jobs at higher levels.
Influence general attitudes, willingness to transfer within organization, willingness to accept promotions, willingness to cooperate across jobs and commitment to organization.
market wage data
collected from relevant labor market, focusing on key jobs, can collect data in-house, use outside firms or rely on other sources
market pay surveys
Benchmarking: procedure by which an organization compares its own practices against competition
3 issues to consider
Which employers should be included in the survey?
Which jobs are included in the survey?
If multiple surveys are used, how are all rates of pay weighted and combined?
benchmark jobs that have relatively stable content and are common to many organizations so that market-pay survey data can be obtained.
unique to organizations and cannot be directly valued or compared through the use of market surveys.
Ranks jobs on the basis of their relative worth; The simplest and oldest system of job evaluation; Often use paired comparisons to establish ranks
A system of job evaluation in which jobs are classified and grouped according to a series of predetermined wage grades; The descriptions of each of the job classes constitute the scale against which the specifications for the various jobs are compared
Know-how, problem solving, accountability
point system of job evaluation
Determine compensable factors
Assign points to degrees of compensable factors
Rate the job based on the compensable factors
Total points and group into grades/classifications
how an organization combines job evaluation and market pay survey data to produce a pay structure
Uses both job evaluation and market pay survey data and uses statistical procedure to find relationship between points and wages
Pay policy line derives ray rates for both key and non-key jobs. Market rates no longer used for key jobs, causing a greater degree of internal consistency into structure
Pay grade groups jobs into smaller number of pay classes, ranges or pay grades. Each job within the level would have save pay rate
Having extremely wide salary bands, reducing number of levels in a company and reduces hierarchy
Achieves more flexibility
major components of executive compensation package
salary/bonus, stock options, stock grants
major component of CEO Pay; varies with the performance of the stock market
Equal Pay Act of 1963
Prohibits gender discrimination in pay for "substantially equal" jobs
Jobs are equivalent if the require similar levels of skill, effort, and responsibility, and are performed under similar working conditions
Differences are legal if based on:
seniority, job performance, non-gender factors
Fair Labor Standards Act of 1938
Established a minimum wage and overtime pay rate
Minimum wage is $7.25 an hour
Over 40 hours - time and a half
Exempt - those employees (executive, professional, administrative and outside sales) not covered by the FLSA and not eligible for overtime pay.
Davis-Bacon Act and Walsh-Healy Public Contracts Act require federal contractors to pay employees no less than area's prevailing wages.
basic forms of compensation
Hourly: paid for the hours you work
Salary: a set monthly or yearly wage
Exempt: do not receive overtime pay; not covered by FLSA
Non-exempt: expected time and a half for overtime; covered by FLSA