ADMS 3490 Lecture Notes - Lecture 4: Job Evaluation, Life Insurance

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champagnesquirrel993

7 Mar 2016

School

York University

Department

Administrative Studies

Course

ADMS 3490

Professor

Parbudyal Singh

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Document Summary

Base pay: the portion of an individual"s compensation that is based on a unit of time worked. Wage: pay based on an hourly time period. Salary: pay based on a weekly, monthly, or annual time period. Performance pay: any type of financial reward provided only when certain specified performance results occur. These results may be based on the performance of individual employees, a group or team of employees, or the entire organization. Indirect pay/ benefits: any type of employer-provided reward that serves an employee need but is not part of base or performance pay. Market pricing: establishing base pay by determining the average amount of pay other employers are offering for a given job. Job evaluation: establishing base pay by ranking all jobs in the firm according to their value to that firm. Pay-for-knowledge system (pks): establishing base pay according to the total value of the skills and competencies an employee has acquired.

Related Questions

MUTIPLE CHOICE; CIRCLE THE CORRECT ANSWER. FOR TRUE/FALSE, JUST CIRCLE T OR F

31) According to research cited in the text, what is the primary reason that top-performing/high commitment employees gave for voluntarily leaving an organization?

A) career development

B) work-life balance

C) promotions

D) salary

32) The process of advising, counseling, and guiding employees is known as ________.

A) coaching

B) appraising

C) assessing

D) mentoring

33) ________ is a process for enabling employees to better understand and develop their career skills and interests and to use these skills and interests most effectively within the company and afterwards.

A) Career management

B) Career development

C) Career planning

D) Performance management

34) Jackie is working with a coach to identify her personal skills and interests. Afterwards, she will investigate opportunities that fit her skills and interests and set specific career goals. In which of the following activities is Jackie most likely participating?

A) career management

B) career development

C) career planning

D) job training

35) Which of the following is the simplest and most often used method for predicting the future performance of a candidate for promotion?

A) prior performance

B) aptitude tests

C) assessment centers

D) psychological exams

36) Poor attendance and voluntary turnover are most likely characteristics of ________.

A) decreasing employee engagement

B) minimal job expectations

C) shrinking labor markets

D) poor supervision

37) Which of the following terms refers to all forms of pay or rewards going to employees and arising from their employment?

A) salary

B) employee benefits

C) wage reimbursement

D) employee compensation

38) John is a sales representative in a jewelry store. He typically works 40 hours per week and his pay is completely based on his sales. He earns a 5% commission for every sale he makes. Which of the following terms best describes John's situation?

A) performance-based compensation

B) indirect financial compensation

C) time-based compensation

D) piecework pay

39) Which of the following is NOT a type of direct financial payment?

A) wages

B) insurance

C) incentives

D) commissions

40) John is a sales representative in a jewelry store. He typically works 40 hours per week and his pay is completely based on his sales. He earns a 5% commission for every sale he makes. Which of the following terms best describes John's situation?

A) performance-based compensation

B) indirect financial compensation

C) time-based compensation

D) piecework pay

Based on following text in your own words, list anddefine the four categories of employment income,providing an example (other than regular pay) foreach category.

Employment Income

An individual working for an employer receives compensation orpay, known as remuneration, for the services they perform. Where anemployee-employer relationship exists, remuneration is referred toas employment income. Employment income can be categorized intoearnings, allowances, benefits and taxable expensereimbursements.

Earnings

Earnings are dollar amounts the employer pays an employee forthe work they perform. Earnings can be paid as:
Â· a salary
Â· a rate for each hour worked
Â· a rate per piece of goods produced or picked
Â· a disability payment for time off work due to illness
Â· a payment for vacation time
Â· a premium payment for overtime hours worked
Â· a premium payment for hours worked on shift

Deciding which types of earnings are paid and how they arecalculated is primarily a decision made by the employer. Earningsare pensionable, insurable and taxable, and therefore subject toall statutory deductions.

Allowances

Allowances are additional dollar amounts paid to employees forthe use, or anticipated use, of their personal property forbusiness purposes. Allowances can also be provided to employees tocover the cost of personal living expenses associated withemployment. The most common types of allowances cover the costsincurred by the employee for car, meals, uniforms, safety shoes orother particular types of clothing for business reasons. Undercertain conditions, allowances are not considered employment incomeand therefore are not subject to statutory withholdings.

Benefits

Benefits are dollar values attributed to something the employerhas either provided to an employee or paid for on an employeeâsbehalf. Usually, when an employer provides an employee withsomething (for example, a company-leased automobile is given to theemployee for both business and personal use) or pays for somethingon an employeeâs behalf (for example, group term life insurancepremiums), it results in a benefit to the employee. There arecertain situations where benefits are not included in employmentincome and therefore are not subject to statutory withholdings.

Expense Reimbursements

Similar to allowances, expense reimbursements are also dollaramounts paid to employees to cover expenses that they incur whileperforming their job. For the most part, expense reimbursementsgenerally fall outside of payroll because they are business-relatedand therefore not employment income to employees. These expensesare claimed on an expense report, supported by receipts, andusually submitted directly to the accounting department forreimbursement. As such, they are not considered in the calculationof an employeeâs pay. Some organizations choose to reimburseexpenses through payroll in which case they are not subject to anystatutory deductions; they will, however, affect the net pay. Anyreimbursements made to an employee for personal living expenses areconsidered taxable to the employee, included in income and subjectto statutory withholdings.

Whether to Work Overtime or Hire Additional Employees

The Fair Labor Standards Act requires employers to pay nonexemptstatus employees an overtime rate at least equal to 1.5 times thenormal hourly wage for each hour worked beyond the 40â-hourworkweek period.

ACME manufacturing has just signed a lucrative contract toproduce the casings for flashlights. The contract spans five years.During thisâ time, ACME must increase its total manufacturingoutput by 25 percent. To meet this addedâ demand, theâ company'scompensation and HR leadership will have to decide whether torequire current manufacturing employees work additional hours perâweek, hire additionalâ workers, or both. Making this decision willrequire an analysis of compensation costs and otherâ HR-relatedexpensesâ (for example,â training).

Overtime Payâ Scenario:â Let's assume that ACME employees 1,000manufacturing employees and each of these employees earnsâ$25 perhour. Because manufacturing output will increase by 25 percent,each employee would have to work an additional 10.00 hours perweek. For each of these additional 10.00 hours, employees wouldearn $37.50 per hour â($25 per hour timesÃ1.5 hourly overtime payâpremium). Hiring Additional Workersâ Scenario: To meet thisadditional demand â(25â% ofâ output), ACME would have to increasetheir workforce by 25 âpercent, or 250 employeesâ(1,000 person workforce timesÃ25â%). Besides hourlyâ pay, there are costs associatedwith hiring new employees. These include employee benefits $10,000annually per newâ employee), recruitment â($5,000 on aâ one-timebasis per newâemployee), training â($3,000 on aâ one-time basisperâ employee), and termination â($12,000â) upon the end of thecontract period.

Is it more cost effective to have current manufacturingemployees work on an overtime basis during the life of the contractor to hire newâ employees?

â1) Overtime option

If current manufacturing employees work additional hours perweekâ (overtime), what would be the additional compensation duringthe term of theâ contract?

What is the number of overtime hours needed per week to meet theadditionalâ demand?___hours per week

What would be the weekly overtimeâ compensation?___ per week

What would be the annual overtime compensationâ (assume 52 weekperâ year)? ___per year

What would be the compensation during theâ 5-year contract? Thetotal cost of the additional compensation during the term of thecontract wouldâ be: ___in five years.

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ADMS 3490 Lecture Notes - Lecture 4: Job Evaluation, Life Insurance

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