For Phyllis Young only.Answer the Question as Described. It is due in 20 hours.

Week 2 - Instructor Guidance

BUS 692 Week Two Guidance                                                                                                                              Marr

Employee Selection and Pay Decisions and Equity

EMPLOYEE SELECTION     

I.        Strategic Choices

A.        Organizations can choose to make or buy their employees.

Organizations can hire less skilled labor and invest in training (make) or hire skilled labor and professionals (buy) at a higher salary.

B.        Organizations make strategic decisions regarding the budget allocated for recruiting and selecting employees.

Most organizations do not even cost hiring an employee. In order to strategically control recruiting and selection processes, organizations must know the cost-effectiveness of their devices.

C.        An organization can make a strategic choice to explore untapped labor sources.

D.        Organizations make strategic decisions regarding the technological sophistication of their recruiting and selection devices.

The use of computers, videotapes, and telerecruiting are all new advances in recruiting and selection devices, for example, computerized resume and online application systems.

E.        An organization can choose the extent to which internal versus external recruiting methods are used.

F.         An organization must decide whether or not to develop a plan to retain qualified workers.

PAY DECISIONS AND EQUITY                      

I.                  Strategic Choices                

 

A.        How much of the money that is used to cover employee benefits should be paid by the employer and how much should be covered by the employee?

B.        How comprehensive should the plan be?

C.        How flexible should the benefits program be?

II.        Who Pays for the Benefits?

The trend is toward having the employee pick up a greater percentage of the cost of benefits.

III.     How Comprehensive a List of Benefits Shall Be Offered?

Law, such as workers’ compensation, mandates certain benefits, which are called compulsory benefits. Others are offered at the discretion of the employer.

IV.     How Flexible Shall the Benefit Offering Be?

The firm must decide whether to offer a standard package to every employee or allow the employee to choose the benefits he or she wants. It is far more common, today, for employees to have a flexible benefit package.

V.      The Question of Competitiveness

Employers want to offer benefit packages that make them competitive in the market; however, benefits are a big cost to employers. Some researchers argue that most employees are unaware of the cost of their benefits package and therefore that benefits cannot be used as a differential in hiring. Clear communication is paramount.

A little entertainment on pay equity. Enjoy!

EQUAL PAY DAY (Flash Mob)  :   Equal Pay Flashmob   

EXTRA INFORMATION

Composition of Benefit Plans

A.        Required or Mandatory Security

1.         Workers' Compensation—This is a required benefit that protects the employee from costs due to injury on the job. The costs are paid entirely by the employer. Workers' compensation covers not only physical injuries, but injuries from stress-related causes.

2.         Criticisms of Workers' Compensation—Benefits plans vary from state to state, and firms have lobbied against having federal control over this benefit. The best way to lower costs for workers' compensation is to get involved with safety in the workplace and pursue strategies to help lower costs.

3.         Unemployment Compensation—This benefit pays employees for work time missed due to layoff or termination. Most employees are eligible unless they are fired for misconduct.

4.         Social Security—Social Security provides benefits when someone retires or becomes permanently disabled.

5.         Social Security Funding—Social Security is funded jointly by employees and employers.

6.         The Future Challenges of Social Security—Many middle- and high-income workers will not receive back from Social Security what they and their employers paid in. Further, the aging baby-boomers threaten to bankrupt Social Security as life spans increase.

B.        Voluntary Security—Two major security benefit programs used are severance pay and supplemental unemployment benefits (for example, golden parachutes are paid to executives at termination).

C.        Retirement—Pensions are the most common form of retirement benefits.

1.         Employment Retirement Income Security Act (ERISA) of 1974—This law was passed to correct many abuses in pension coverage.

2.         Funding of Pensions—An unfunded plan pays pensions out of current income, and a funded plan pays benefits out of money set aside and invested especially for pensions.

3.         Insurance for Pensions—Pension plans can be insured (administered with guaranteed benefits by an insurance company) or uninsured (administered by the employer).

4.         Contributions—In noncontributory pensions, the employer pays all the funds. In a contributory fund, both the employee and employer fund the pension.

5.         Pension Benefits—Defined contribution plans fix the contribution rate paid by the employee and allow the retirement benefits to vary. In a defined benefit plan, the benefits paid to employees are set.

6.         Portability—In a portable pension plan, employees can move their pension benefit from one employer to another without losing benefits.

7.         Vesting Rights—Vesting is the right to receive benefits from a retirement plan.

8.         Retirement Equity Act of 1984—This law liberalized the pension regulations that affect women and prohibited discrimination against people who take leaves of absence (such as pregnancy leave).

9.         Individual Retirement Accounts (IRAs)—These are retirement funds funded only by the employee.

10.        401 (k) Plans—These plans work like IRAs, but the employer deducts the money from salary and the money can be invested only in a limited set of employer-approved funds.

11.        Keogh Plans—These are self-directed retirement plans used by self-employed individuals.

12.        Early Retirement—Most companies offer early retirement where a person can retire at an early age with fewer benefits.

D.        Time-Off Related Benefits

1.         Holiday Pay—Most employers’ pay for established holidays.

2.         Vacations—Most employers offer paid vacations.

3.         Leaves of Absence—Disability leaves, maternity leaves, jury-duty leaves, leaves for military service, election leaves, and funeral leaves represent the most common types of leaves of absence. The Family and Medical Leave Act gives certain employees up to 12 weeks of leave during a 12 month period to care for a spouse, child, other family member, or the employee's own health problems. This act incorporates birth, adoption, elder care, and foster care situations.

E.        Health and Insurance-Related Benefits—These are some of the most expensive benefit items paid by employers.

1.         Health Benefits—Rising healthcare costs have driven up costs of premiums for health insurance.

2.         Cost-Containment Methods—As healthcare costs increase, employers are trying to cut costs. Only 9 percent of firms pay the entire cost for the employee and his or her family's health insurance.

Health Maintenance Organizations (HMOs)—HMOs were developed to cut healthcare costs. They have, in fact, increased costs in some firms, but HMOs do lower costs for most firms.

Preferred Provider Organizations (PPO)—This is a group organized by a hospital or group of physicians. A PPO allows employees more choices than HMOs.

Employee Co-payment—Some organizations are requiring employees to pay a part of the annual monthly premium.

Employee Payment of Deductible—This requires employees to pay a fee of percentage of the cost for office visits or hospital procedures.

Self-Funded Insurance—These plans are funded by the employer; not an insurance company. Self-insurance has become a popular way of cutting costs.

Wellness-Fitness Programs—Many firms have tried to cut healthcare costs by focusing on preventive employee fitness.

Providing More Information—Providing employees with information about paid procedures allows employees to shop for medical care.

Restrictions on Psychiatric and Substance Abuse Programs—In the past, employers often restricted these benefits; however, most now provide a flexible set of benefits with few restrictions.

Other Techniques—Managed-care programs direct employees to a specific doctor, hospital, or treatment center that will offer the employee a reduced rate. Contracts with pharmacies or ordering drugs through discount mail-order drug plans have also become popular.

Evaluation of Cost Cutting Measures—Some evidence suggests the rate of increase of health care costs has slowed.

3.               Additional Issues in Health Insurance

Legal Requirements—Mandated by Consolidated Omnibus Budget Reconciliation Act (COBRA).

An Aging Population—Older persons consume vast amounts of healthcare costs.

AIDS—The cost of AIDS will put a heavy burden on healthcare costs.

Drug Testing—This has become a controversial issue. Many firms test applicants for drug use.

Expansion of Coverage—Many firms now offer dental, chiropractic, and optometric work in addition to traditional health care.

4.         Nonmedical Insurance Benefits—Long-term disability is offered by many employers. Legal insurance, as well as auto insurance, is offered by some firms.

F.         Financial, Social, and Recreational Benefits—These benefits are referred to as perks.

1.         Nonfinancial—The use of a company car, expense account, club membership, and so on are common perks offered to executives.

2.         Thrift/Stock—Employee thrift, saving, or stock purchase investment plans are also popular.

ESOP—When stock is provided as a part of a profit-sharing plan an ESOP is developed.

3.         Educational Benefits—Many firms offer tuition reimbursements for employees.

4.         Childcare Benefits—Many factors have led to the push for better childcare benefits from employers.

5.         Elder Care—As people live longer, taking care of aging adult parents will become an issue for employees, as will the push for more benefits from employers.

6.         Cafeteria Plans—Cafeteria plans allow employees to pick and choose which benefits they want.

7.         Family Friendly Benefits—Offers employees flexible scheduling, start and end work at their convenience.