Orange Earth

Week 7 IntroductionHuman Resource ManagementMGT 340

Welcome to the seventh week of MGT 340. This week well be covering chapters 11, 12 and 13 in your textbook. Even though I only cover a few of the major points within the chapters, please be sure that you understand all of the concepts within the chapters because the rest of the semester assumes you have a strong grasp of these foundational issues. If anything is unclear, submit your question on Ask Your Professor section in Blackboard.1Legal Issues in CompensationMinimum WageEqual Pay ActChild Labor

Exempt vs. Non-exemptTitle VII

Employee Perceptions of Pay Fairness

3According to equity theory, employees think of their pay relative to their inputs training, experience, and effort.To decide whether their pay is equitable, they compare their outcome (pay)/input ratio with other peoples outcome/input ratios.

Employee Perceptions of Pay FairnessEmployees compare their pay and effort against three yardsticks:What they think employees in OTHER organizations earn for doing the same job.What they think other employees holding different jobs within the SAME organization earn for doing work at the same or different levels.What they think other employees in the SAME organization earn for doing the SAME job as theirs.4In developing a pay structure, it is important to keep in mind employees opinions about fairness. After all, one of the purposes of pay is to motivate employees, and they will not be motivated by pay if they think it is unfair.4Pay Equity (continued)Employee who feel under-rewarded may:Decrease their input (reduce effort)Increase their outcomeStealAsk for or demand a raiseWithdraw from the situation (leave the company or refuse to cooperate)

5Equity theory tells organizations that employees care about their pay relative to what others are earning and that these feelings are based on what employees perceive (what they notice and form judgments about). An organization can do much to contribute to what employees know and, as a result, what they perceive.

If the organization researches salary levels and concludes that it is paying its employees generously, it should communicate this. If the employees do not know what the organization learned from its research, they may reach an entirely different conclusion about their pay.5

6Principles of Effective Incentive Pay Plans

7Legal Requirements for Employee BenefitsBenefits required by law some benefits are required by law which adds to the cost of compensating employees.Tax treatment of benefits benefits plans must meet certain requirements to obtain favorable tax treatment and be considered qualified plansAntidiscrimination laws many laws related to equal employment opportunity apply to benefits policies, as wellAccounting Requirements companies must set aside the funds they need for benefits to be paid when employees retire8Optional Benefits ProgramsOther types of benefits are optional. These include various kinds of insurance, retirement plans, and paid leave.9Optional Benefits Programs:Group InsuranceRates for group insurance are typically lower than for individual policies. Also, insurance benefits are not subject to income tax, as wages and salaries are.When employees receive insurance as a benefit, rather than higher pay so they can buy their own insurance, employees can get more for their money. Because of this, most employees value group insurance.The most common types of insurance offered as employee benefits are medical, life, and disability insurance.10Optional Benefits Programs:Family-Friendly BenefitsAs employers have recognized the significance of employees need to manage conflicts between their work and family roles, many have added family-friendly benefits to their employee benefits programs.11