Organizations under pressure to cut labor costs may respond by

Organizations under pressure to cut labor costs may respond by

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.