Human Resource Management – Final Exam – Flashcards
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Pay level
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the compensation decision concerning how much to pay employees relative to what they could earn doing the same job elsewhere; external equity, internal equity
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External equity
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employee perceptions of fairness based on how much they are paid relative to people working in other organizations; determined using pay surveys
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Pay survey
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gathering information to learn how much employees are being paid by other organizations
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Internal equity
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employee perceptions of fairness based on how much they are paid relative to others working in the same organization; determined using point systems
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Point system
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a process of assigning numerical values to each job in order to compare the value of contributions within and across organizations
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Meet-the-market strategy
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a compensation decision to pay employees an amount similar to what they can make working for other organizations
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Lead-the-market strategy
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a compensation decision to pay employees an amount above what they might earn working for another organization
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Lag-the-market strategy
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a compensation decision to pay employees an amount below what they might earn working for another organization
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Transactional commitment
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a sense of obligation to an organization that is created primarily by financial incentives; Bargain Laborer, Free Agent
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Relational commitment
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a sense of loyalty to an organization that is based not only on financial incentives but also on social ties; Loyal Soldier, Committed Expert
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Uniform rewards
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a reward system that minimizes differences among workers and offers similar compensation to all employees; Bargain Laborer, Loyal Soldier
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Variable rewards
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a reward system that pays some employees substantially more than others in order to emphasize differences between high and low performers; Free Agent, Committed Expert
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Reinforcement theory
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a psychological theory suggesting that people are motivated by antecedents (environmental cues) and consequents (rewards and punishment); pay-for-performance
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Pay-for-performance
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compensation practices that use differences in employee performance to determine differences in pay
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Goal-setting theory
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a psychological theory suggesting that an individual's conscious choices explain motivation
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Justice theory
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a psychological theory suggesting that motivation is driven by beliefs about fairness
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Equity theory
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a justice perspective suggesting that people determine the fairness of their pay by comparing what they give to and receive from the organization with what others give and receive; distributive justice, procedural justice
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Distributive justice
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perceptions of fairness based on the outcomes (such as pay) received from an organization
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Procedural justice
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perceptions of fairness based on the processes used to allocate outcomes such as pay
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Expectancy theory
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a psychological theory suggesting that people are motivated by a combination of three beliefs: valence, instrumentality, and expectancy
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Valence
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the value that an individual places on a reward being offered
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Instrumentality
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the belief in the likelihood that the reward will actually be given contingent on high performance
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Expectancy
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an individual's belief that he or she can do what is necessary to achieve high performance
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Agency theory
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an economic theory that uses differences in the interests of principals (owners) and agents (employees) to describe reactions to compensation
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Fair Labor Standards Act (FLSA)
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federal legislation that governs compensation practices and helps ensure fair treatment of employees; exempt employees, nonexempt employees
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Exempt employees
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workers, such as executives, administrators, professionals, and sales representatives, who are not covered by the FLSA
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Nonexempt employees
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all employees who are not explicitly exempt from the FLSA, sometimes referred to as hourly workers
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Equal Pay Act
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amendment to the FLSA that requires employers to pay men and women the same when performing the same job
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Compensation package
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the mix of salary, benefits, and other incentives that employees receive from the organization
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Base pay
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compensation that is consistent across time periods and not directly dependent on performance level; hourly wage or annual salary
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At-risk pay
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compensation where the amount varies across pay periods depending on performance; individual incentives, group incentives, organization-level rewards
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1. piece-rate 2. commission 3. merit pay increase 4. merit bonus
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Individual incentives (4)
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Piece-rate incentive
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an individual incentive program in which each employee is paid a certain amount for each piece of output
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Commission
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an individual incentive program in which each employee is paid a percentage of the sales revenue that he or she generates
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Merit pay increase
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an individual incentive program in which an employee's salary increase is based on performance
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Merit bonus
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a one-time payment made to an individual for high performance
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1. group-based team reward 2. gainsharing
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Group incentives (2)
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Group-based team reward
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a group-level incentive provided to members of a team when the team meets or exceeds a specific goal
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Gainsharing
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a group-level incentive program that rewards groups of employees for working together to reduce costs and improve productivity
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1. profit sharing 2. stock options 3. employee stock ownership plans (ESOPs)
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Organization-level rewards (3)
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Profit sharing
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an organization-wide incentive program under which a portion of organizational profits are shared with employees
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Stock options
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rights to purchase stock at a specified price in the future
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Employee stock ownership plan (ESOP)
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a plan under which an organization sets up a trust fund to hold and manage company stock given to employees
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1. social security 2. unemployment insurance 3. workers' compensation 4. unpaid leave 5. healthcare plan
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Legally-required benefits (5)
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Social security system
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a federal program that requires workers to pay into a retirement fund, from which they will draw when they have reached a certain age
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Unemployment insurance
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a network of state-mandated insurance plans that provide monetary assistance to workers who lose their jobs through no fault of their own
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Workers' compensation
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state programs that provide workers and families with compensation for work-related accidents and injuries
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Healthcare plan
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an insurance plan that provides workers with medical services
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1. life insurance 2. disability insurance 3. flexible schedule 4. retirement; defined benefit, defined contribution 5. paid leave; pay without work, sick leave
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Discretionary benefits (5)
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Life insurance
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a form of insurance that pays benefits to family members or other beneficiaries when an insured person dies
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Disability insurance
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a form of insurance that provides benefits to individuals who develop mental or physical conditions that prevent them from working
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Defined benefit plan
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a retirement plan under which an organization provides retired individuals with a fixed amount of money each month; the amount is usually based on number of years employed and pay level at retirement
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Defined contribution plan
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a retirement plan under which the employer and/or the employee contribute to a fund for which only the contributions are defined and benefits vary according to the amount accumulated in the fund at retirement
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Pay without work
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compensation paid for time off, such as holidays
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Sick leave
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compensation paid to employees who are unable to work because they are ill
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1. traditional 2. managed care; HMO, PPO 3. health savings account
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Types of healthcare plans (3)
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Health maintenance organization (HMO)
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a healthcare plan under which the provider receives a fixed amount for providing necessary services to individuals who are enrolled in the plan
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Health savings account (HSA)
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a personal savings account that an employee can use to pay healthcare costs
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Line of sight
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the extent to which employees can see that their actions influence the outcomes used to determine whether they receive a particular reward
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Flexible benefits program/cafeteria benefits
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a benefit program that allows employees to choose the benefits they want from a list of available benefits
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Wagner Act
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a federal law passed in 1935 that created the National Labor Relations Board and provided employees with the express right to organize unions; formally known as the National Labor Relations Act
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National Labor Relations Board (NLRB)
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a board of five members appointed by the POTUS to enforce the Wagner Act
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Taft-Hartley Act
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a federal law passed in 1947 that regulates union activities and requires unions to bargain in good faith; formally known as the Labor-Management Relations Act
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1. collective action 2. union organizing 3. joining a union 4. going on strike 5. collective bargaining
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Wagner Act protected activities (5)
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Collective bargaining
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the process in which labor unions and employers negotiate contracts defining the terms and conditions under which union members will work
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1. exclusive representative of bargaining unit 2. wages, hours, terms and conditions of employment 3. grievance procedures 4. union security provisions
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Components of collective bargaining (4)
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Right-to-work laws
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state laws that require open-shop labor agreements
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Labor union
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an organization representing the collective interests of workers
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Featherbedding
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a practice in which a union requires a company to pay employees wages for work that is not performed; defined as an unfair labor practice
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Closed shop
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an organization that hires only workers who belong to a certain union
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Union shop
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an organization that requires workers to join a union as soon as they are hired
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Boycott
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an organized action in which consumers refuse to purchase goods or services from a company; unions engaged in labor disputes may support these of the companies involved in the disputes
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Mandatory bargaining topics
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issues, such as wages, hours, and working conditions, that must be discussed as part of collective bargaining
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Strike
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an action in which union members refuse to perform their job duties as a result of a labor dispute
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Lockout
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an action in which an employer closes a workplace or otherwise prevents union members from working as a result of a labor dispute
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Union steward
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a representative of the union who acts as an advocate for employees
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1. higher pay 2. better benefits 3. more job security 4. better working conditions
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Impact of unions on unionized employees (4)
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1. higher productivity 2. lower profits 3. less flexibility
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Impact of unions on union shops (3)
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Authorization card campaign
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a campaign in which employees or labor union representatives seek signatures from employees requesting a vote on union representation
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Decertification election
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an election to remove a union's authorization to represent employees
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Alignment
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the state in which organizational practices are in their proper place relative to other practices
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Vertical alignment
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the state in which an organization's human resource strategy supports its competitive business strategy
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Horizontal alignment
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the state in which individual human resource practices fit together and support each other
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Turnaround strategy
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a competitive business strategy that focuses on radical change to return a company to profitability
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Global expansion strategy
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a competitive business strategy that focuses on increasing an organization's presence in foreign countries
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Growth strategy
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a competitive business strategy that focuses on expanding products and services into new markets
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Rational strategic approach
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an approach in which organizational leaders carefully plan a strategy before carrying it out
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Evolutionary strategic approach
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an approach in which an organization's strategy unfolds over time in response to common issues
