Lag Time Between When Data Was Collectedused - Lecture Notes

This causes compensation data to become obsolete fairly quickly: Lag time between when data was collected/used. Hosa Conducts a survey of salaries at UB2, finds 50% of workers fall below $52,000. Which quartile do the workers fall: Second. How often is the CPI calculated for the US: Monthly This term refers to the groupings of jobs based on compensable factors for purposes of applying pay policies: Pay grades. Which term is used to describe the situation between the pay were the spread between newly hired employees and qualified employees is small: Compression. How are compa-ratios calculated? Employees pay rate/pay rate mid-point. This term describes the set of skills necessary to perform a specific job/group of similar jobs: Skill Block. Which of the following is not a condition manifesting short-term disability: Recovery from illness. What is the most common type of LI offered by companies? Term. This type of flexible work schedule is 4, 10-hour days a week: Compressed work week. Which of the following would be considered an act as part of a company’s wellness program: offering anti-smoking courses. This term refers to the % of the health bill that insured employee is required to pay: co-insurance. How often will Jill receive an unemployment check: Weekly. This Medicare plan was established with passing of BBA 1997 as an alternative to original program A & B: Medicare Advantage IRS uses key employees for: Determine necessity on top heavy provisions in employer sponsored qualified retirement plans. These entitle an executive to purchase company stock for predetermined price: Incentive Stock Option. Market-Competitive Pay: Company’s compensation policy, key role in promoting recruitment & Retention. Using executive compensation theory, shareholders negotiate compensation contracts with executives in hopes of aligning executive’s interests with theirs: Agency (1) Strategic Analysis: an examination of a company’s external market context and internal factors. External; industry profile, information on competition. Internal; financial condition. (2) Assess Competitors’: compensation surveys, collection and analysis of competitors’ compensation data (3) Integrate internal job structures w/external market pay rates: goal is to set pay rates based on matches between a company’s job and corresponding benchmarks. (4) Determine Compensation Policies: that fit with their companies’ standing and competitive strategies. Preliminary Considerations: what is hoped to gain & custom development vs. use of existing comp. survey. Competitors’ Pay Practices: base pay, incentive awards, mix & level of discretionary benefits. Compensation Surveys: defining relevant labor market (occupational, geographic) & choosing benchmark jobs (established, common, range of jobs). Job leveling: process for correcting differences between company’s jobs and benchmark jobs. Central tendency: set of data center around a central point (1) Arithmetic mean: sum of salaries/# of salaries (2) Median (midpoint): middle value of data Variation: amount of spread or dispersion in a set of data (1) Standard Deviation: mean distance of each figure from the mean (2) Quartile: percentile of figures below a point based on four groups (3) Percentile: figures below a point based on 100 groupings Regression: statistical procedure designed to find the best fitting line between two variables. Pay-Level Policies: (1) Market lead (75th) levels about market pay line, best for differentiation (2) Market Match (50th) pay according to market, appropriate with differentiation (3) Market lag (25th) below market, best for low-cost strategies Pay Mix: combination of core compensation and employee benefits components that make up an employee’s total compensation package. Pay Structures: pay rate differences for jobs of unequal worth. Pay individuals according to; credentials, knowledge, and job performance. Exempt: not subject to overtime; salaried supervisors, managers, professionals, and executives. Nonexempt: subject to overtime provisions, hourly, nonsupervisory. Pay Grades: based on compensable factors, values and management philosophy. Green circle rates: paying below minimum pay rates; resulting from paying employees who do not meet the minimum requirements less than the minimum rate Red Circle Rates: paying above minimum rates; results from failure to raise pay range minimums, attempting to retain exemplary employees. Compa-Ratios: evaluates a pay structure, divide pay rates by midpoint. 1= market match, <1 = market lag, >1 = market lead Base pay: within limits of pay grade, consistent with new employees at similar jobs, abide by; Title VII, EPA, & ADEA Pay-for-Performance Objectives: improve sales productivity, sales coverage of current customers, & grow sales overall. Discretionary Benefits: Protection programs: provide family benefits, promote health, and guard against income loss Paid time-off: employees time off with pay Services: enhancements such as tuition reimbursement/daycare Disability Insurance: short & long term Life insurance: protects employees’ families by paying a specified amount to an employee’s beneficiaries upon death Retirement programs: provides income to employees and their beneficiaries during some or all of retirement. Defined Benefit plans: guarantee retirement benefits specified in the plan, usually in terms of a monthly sum equal to a % of participant’s preretirement pay multiplied by number of years he or she has worked for employer. (fixed formula). Employees/Employers make contributions, invested in stocks, bonds or money market accts. Types; 401k, Roth, 403b, deferred profit sharing plans. Hybrid plans: combine features of traditional DB and DCP. Defines benefits for each employee by reference to amt of employee’s hypothetical account balance. IRC: regulations pertaining to all forms of taxation, reduces companies’ taxable income by the amt it contributes to a qualified retirement plan, also reduces an employee’s taxable income by amount contributed to a qualified retirement plan. Standards for Qualified plans (ERISA): Participation (required; 21yrs old, 1 yr of service, & 1,000 hrs wrk), coverage (employers may not exclude after participation criteria has been meet), vesting (employee’s non- forfeitable rights to pension benefits; Cliff: 100% vesting after 3 yrs, 6 yr graduated schedule; grant vesting rights gradually.), nondiscrimination (prohibits dis. In favor of highly compensated employees). Pension Protection Act: Defined benefits; make it more difficult for employers to skip making required payments. Defined Contribution; enable companies to enroll their employees automatically in these plans. Legally Required Benefits: Designed to protect individuals from catastrophic events, Protection programs; promote safety & assist families in crisis. Social Security: Unemployment insurance: temp. income for spells of unemployment that result through no fault of the employee, terminated for cause does not qualify, layoff is eligible. Eligibility; able/available for work, actively seeking work, not refuted suitable work, & must have been employed for last 4 or 5 quarters. OASDI: 40 quarters of credit, 62 for partial benefit, 67 full. Survivors benefits; deceased was fully insured, dependent, unmarried children, widow age 60 or older. Disability; fully insured, disability must last one year or be terminal. Medicare: 65 & older Workers compensation: eliminate legal fees and time, encourage employer safety. FMLA: 12 weeks unpaid leave. Retention of; seniority, credit for service. Broad Banding: Medicare Part A – how is it financed: employees and employers. Balanced Budget Act: established Medicare + Choice: Medicare Advantage. Provides beneficiaries the opportunity to receive health care from a variety of options; including feefor-service plans, MCP, MSA. Agency Theory: shareholders delegate control to top executives to represent their ownership interests; however, top executives do not hold majority shares. Tournament Theory: lucrative compensation as the prize in a series of tournaments among mid-level managers who aspire to be the CEO. Social Comparison Theory: individuals tend to select social comparisons who are slightly better than themselves.