【正文】 Compensation (cont’ d) ? Fair Labor Standards Act (FLSA) (cont’d) ? Child labor ? Youth under the age of 16 can work on a restricted basis ? Youth over 16 cannot work in hazardous jobs including driving a motor vehicle, doing wrecking and demolition, or being exposed to radioactive substances Regulations Regulations amp。 Compensation ? DavisBacon Act — requires contractors and subcontractors with contracts in excess of $2,000 with the federal government to pay workers wages and benefits equal to local prevailing wages and benefits ? WalshHealey Act — requires contractors with contracts over $10,000 to pay the federal minimum wage for the first 40 hours and times the minimum wage for any additional hours during the week Regulations Regulations amp。 Compensation ? Labor supply — when market is tight, panies have to pay higher wages to attract and retain employees ? Labor market’s supply and demand have a huge impact on market wages – how a firm decides whether to follow, lead, or lag the market ? Leading the market helps a firm attract more qualified workers ? A firm may lead the market in certain critical jobs ? Pay practices need to match employee pay preferences Environmental Influences Technology amp。 Compensation ? Company culture establishes the priorities for the pay policy (., if firm values teamwork, teamwork will be rewarded) ? Company culture sends an message to the employees about what rewards they can expect to receive ? Managers need to municate pay decisions and know what types of rewards are valued by employees Organizational Demands Employee Concerns amp。 Compensation ? Internal value of jobs — strategy will determine tasks, duties, and responsibilities a firm considers most valuable in achieving its goals ? A firm’s strategy affects the pay mix (base pay vs. variable pay) ? Ways to increase employee base pay: ? Costofliving adjustments (COLAs) — keep salaries from lagging behind external market and to offset rise in prices of goods and services (uses CPI) ? Merit increases — salary increase based on how well employee has performed ? Variable pay — includes bonuses, missions, and stock options Organizational Demands Company Characteristics amp。 effort) to justify higher rewards when they feel overrewarded. Decrease inputs to pensate for lower rewards when they feel underrewarded. Change the pensation they receive through legal or other actions (., unionization, grievance) Modify their parisons by choosing another person to pare themselves against. Distort reality by rationalizing that the inequities are justified. Leave the situation in inequities cannot be resolved. Consequences of inequity Internal Alignment ? Occurs when each job in a pany is valued appropriately relative to every other job in terms of its ability to help the firm achieve its goals ? Relative worth hierarchy for determining salaries is established ? Pay rates are assigned to jobs ? Process is done through job evaluation approaches: ? Job ranking ? Job classification ? Point factor ? Factor parison Internal Alignment (cont’d) (1) Job Ranking Reviewing job descriptions and listing jobs in order from highest to lowest worth to pany ? Fairly hard to do in a large pany ? Need to create a framework to process the information found in all the job descriptions ? Largely subjective Internal Alignment (cont’d) (2) Job Classification Developing broad descriptions for groups of jobs that are similar in terms of tasks, duties, responsibilities and qualifications Wage range is attached to each classification reflecting relative worth of the job in that classification ? ., the federal government’s ‘prefix GS’ ? Sometimes managers want to reclassify jobs to give a particular employee a higher salary Internal Alignment (cont’d) (3) Point Method ? Quantitative approach that uses a point value scheme resulting in a score for each job ? Begins with identifying a set of factors for which the pany is willing to pay — called “ pensable factors ? Point manual contains description of each factor and what each degree of the factor represents Internal Alignment (cont’d) (3) Point method (cont’d) ? Represent the range of jobs in the pany ? Scores for these jobs enable pany to pare other jobs to the benchmark jobs and determine which should be paid more or less ? Job grades are creat