HRM Test 3 Study Guide PDF

Study Guide Test 3 HR Chapter 11 Definitions 1. Wages- Payments calculated directly on the basis of time worked by employees 2. Commision- A percentage of the revenue generated by sales that is given to an agent or salesperson 3. Garnishment- A court order that directs an employer...

Study Guide Test 3 HR Chapter 11 Definitions 1. Wages- Payments calculated directly on the basis of time worked by employees 2. Commision- A percentage of the revenue generated by sales that is given to an agent or salesperson 3. Garnishment- A court order that directs an employer to set aside a portion of an employee’s wages to pay a debt owed to a creditor 4. Pay Survey- Collection of data on compensation rates for workers performing similar jobs in other organizations 5. Compa-ratio- Pay level divided by the midpoint of the pay range 6. Claw-back Provision- Provision which permits the organization to require an employee to return rewards obtained through unethical or negligent actions 7. Gain Sharing- System of sharing with employees greater than expected gains in profits and/or productivity 8. Consumer Credit Protection Act- Regulations passed as a part of the Consumer Credit Protection Act limit the amount of wages that can be garnished. The act also restricts the right of employers to terminate employees whose pay is subject to a single garnishment order. 9. Market Pricing Method- Uses market pay data to identify the relative value of jobs based on what other employers pay for similar jobs Concepts 10. IRS Independent Contractor status- Most federal and state entities rely on the criteria for independent contractor status established by the Internal Revenue Service (IRS). The general principle is that a company may control only the result of the work being contracted but not “what” will be done or “how” it will be done. Factors considered by the IRS include the amount of behavioral and financial control a company exercises over the contracted worker. Additional relationship factors such as whether a written contract exists and the duration of the relationship are also considered. 11. Understand the inputs and outputs in equity theory- States that individuals judge fairness (equity) in compensation by comparing their inputs and outcomes against the inputs and outcomes of referent others a. Inputs: time, effort, loyalty, commitment, skill, knowledge, and enthusiasm b. Outputs: pay, job security, benefits, praise, recognition, and thanks. 12. Performance Philosophy of compensation- Assumes that compensation decisions reflect performance differences. Pay raises or incentives are structured to reward performance differences (quantity, quality, speed of work, customer satisfaction, etc.) among employees. Outstanding performers are compensated with substantially greater pay increases and higher variable rewards than employees who perform at only a satisfactory level. Employees who perform below standards do not receive pay increases and are often placed on performance-improvement plans. Few organizations are exclusively pay for performance, but there has been an increased use of it and performance measures should reflect important outcomes to shareholders, customers, and employees. a. Pay & raises based on performance, No raises for poor-performing employees, market-adjusted pay scales, No raises for length of service or job tenure, Industry comparisons of total rewards 13. Entitlement Philosophy of compensation- Assumes that individuals who have worked another year with the company are entitled to pay increases with little regard for performance differences. When organizations give automatic increases to their employees every year, they are using the entitlement philosophy. Most employees receive the same or nearly the same percentage increase. a. Pay & raises based on length of service, Across-the-board raises, Pay Scales increase annually, Industry comparisons of pay only, Holiday bonuses given to all employees 14. What are pay scales and pay grades and what are the differences?- a. Pay grades- Groupings of individual jobs that have approximately the same value to the organization, 11-17 grades generally used in small-medium sized companies. Set using Job evaluation points or market banding. b. Pay Ranges (Scales)- Once pay grades are determined, the pay range for each pay grade must be established. Anchors for ranges are established then, market data  are used to determine the minimum and maximum pay rates for each job grade. The midpoint is computed by averaging the range of minimum and maximum pay rates. Once pay grades and ranges have been computed, then the current pay of employees is compared with the proposed ranges. It is common to have broader pay ranges for higher-level job grades because more discretion is needed to reflect capability and performance differences. c. Differences: Pay Grades are the groupings of individual jobs, and Pay Ranges (Scales) are ranges within those grouping where pay varies 15. FLSA overtime pay requirements- The FLSA established overtime pay requirements for nonexempt employees at 1.5 times the regular pay rate for all hours worked over 40 in a week. There are other exceptions like farm workers, but these are rare. 16. Dodd Frank act and “Say-on-pay”- Executive compensation is handled differently from employee pay in most public corporations, privately held companies, and even tax- exempt organizations. Frequently determined by the governing board of directors, executive compensation in public corporations is also subject to shareholder approval via a “say-on-pay” provision in the Dodd-Frank Act 17. Discretionary system of determining bonuses- When performance results are good, bonuses go up. When performance results are not met, bonuses go down or disappear. Many employers base part of an employee’s bonus on individual performance and part on company results, as appropriate a. Factors affecting it: Establishing clear, metric-based employee reviews; Ensuring that employees who have not met performance criteria do not receive a payout; and Educating managers and employees about the incentive plan details 18. Measure of organizational performance in variable pay plans- Variable pay plans broadly available to most employees improves organizational performance. An organizational incentive system compensates all employees according to how well the organization as a whole performs during the evaluation period. These programs often share some of the financial gains made by the firm with employees through payments calculated as a percentage of the employee’s base pay. The basic concept behind organizational incentive plans is that overall results depend on organization-wide efforts and cooperation. Organizational incentives get everyone in the company “rowing in the  same direction.” Two common organizational variable pay systems are profit sharing and employee stock plans. a. Profit sharing is a system to distribute a portion of organizational profits to employees. b. A stock option plan gives employees the right to purchase a fixed number of shares of company stock at a specified exercise price for a limited period of time. c. Employee stock ownership plan (ESOP)- Designed to give employees significant stock ownership in their organizations 19. Understand the differences between and types of incentives for individuals, teams, and organizations a. Individuals- Individual incentive systems tie personal effort to additional rewards for the individual employee. The following four conditions are important when using individual incentive plans: Individual performance must be identifiable; Individual competitiveness must be desirable; Individualism must be stressed in the organizational culture; Individuals must be in control of the pace of production. Piece-rate systems are the most basic individual incentives, and they determine employee pay based on the level of output produced or work completed. Under a piece-rate system, wages are determined by multiplying the number of units produced by the piece rate for one unit, and inequalities in pay naturally occur. Other individual incentives: bonuses, non-monetary incentives, performance/ service/ recognition awards. b. Teams- Studies have shown that when employees participate in team-level incentives, they share more information among the team members, and distributing rewards is done equally or equitably. Rewards distributed in equal amounts to all members may be perceived as unfair by employees who work harder, have more capabilities, or perform more difficult jobs. This problem is compounded when an individual who is performing poorly prevents the team from meeting the goals needed to trigger the incentive payment. A related issue to this is free riders. The system of sharing greater than expected gains in profits and/or productivity with employees is gainsharing. Managers and employees are trained in process assessment methods, and they share ideas and suggestions to create gains for the organization and the work team  c. Organizations- An organizational incentive system compensates all employees according to how well the organization as a whole performs during the evaluation period. The basic concept behind organizational incentive plans is that overall results depend on organization-wide efforts and cooperation. Organizational incentives get everyone in the company “rowing in the same direction.” Two common organizational variable pay systems are profit sharing and employee stock plans. Organizational incentives give all employees rewards based on the entire organization's performance and create incentives for all employees to perform well. 20. Under FLSA, what happens if a state’s minimum wage is higher than federal? Which does the company pay? a. State Minimum Wage 21. Understand a pay adjustment matrix- Integrating performance appraisal ratings with pay changes is done through a pay adjustment matrix or merit-based performance matrix. A pay adjustment matrix reflects an employee’s eligibility for pay increase. The matrix considers two factors—the employee’s level of performance as rated in an appraisal and the employee’s position in the pay range (their current pay level quartile), which is often related to experience and tenure. An employee’s placement on the chart determines his or her recommended pay increase. Chapter 12 Definitions 22. HIPAA- Health Insurance Portability and Accountability Act, one of the most important laws governing employee medical records. HIPAA allows employees to switch their health insurance plans when they change jobs and to enroll in health coverage with the new company regardless of pre-existing health conditions. The statute also prohibits group insurance plans from dropping coverage for a sick employee and requires them to make individual coverage available to people who leave group plans. These provisions require employers to provide privacy notices to employees and to carefully store sensitive employee personal information. They also regulate the unauthorized disclosure of protected health information.  23. Managed Care- Approaches that monitor and reduce medical costs through restrictions and market system alternatives 24. Serious health condition under FMLA- An illness or injury that requires inpatient care or continuing treatment by a health care provider for medical problems that exist beyond three days 25. 1986 amendment to the Age Discrimination in Employment Act (in regard to retirement)- According to a 1986 amendment to the Age Discrimination in Employment Act (ADEA), most employees cannot be forced to retire at a specific age. 26. Adverse selection- Situation in which only higher-risk employees select and use certain benefits 27. Medicare- Medicare was implemented in 1965 to provide medical care for people over the age of 65. Medicare is a government-operated health insurance program for older Americans (age 65 and above) and for some citizens with disabilities. Medicare is funded by a tax on employers and employees. Each party pays 1.45 percent of employee earnings. 28. Paid-time-off or PTO program- Plans that combine all sick leave, vacation time, and holidays into a total number of hours or days that employees can take off with pay 29. Bereavement leave- Also called Funeral leave. An absence of up to three days for the death of immediate family members is often granted. Some policies also allow unpaid time off for the death of more distant relatives. 30. Consolidated Omnibus Budget Reconciliation Act (COBRA)- requires that most employers with 20 or more full-time and/or part-time employees offer extended health care coverage to certain groups of plan participants. 31. Stock Purchase plan- Plans where employees may buy shares in the company at a discount, or the company pays the brokerage fees Concepts 32. Workers’ compensation: What is it? Who funds it? What types of accidents qualify? Does it matter who’s fault the accident is? a. Workers’ Comp- Security benefits provided to workers who are injured on the job. Workers’ compensation regulations require employers to provide cash benefits, medical care, and rehabilitation services to employees for injuries or  illnesses that occur within the scope of their employment. In exchange, employees give up the right to pursue legal actions and awards. b. Who funds it- State laws require most employers to provide workers’ compensation coverage by purchasing insurance from a private carrier, state insurance fund, or self-insuring. Workers’ compensation programs are funded at the employer’s expense; workers cannot be required to make financial contributions for this coverage. c. Qualifying accidents- Exclusive remedy means that workers’ compensation benefits are the only benefits injured workers may receive from the employer to compensate for work-related injuries. Also zero-tolerance drug policies can affect it, especially with things like marijuana use d. Fault- No-fault insurance means that an injured worker receives benefits even if the accident was the employee’s fault. 33. What is a defined contribution plan? Who bears the risk in defined contribution plans? a. A defined contribution plan is a retirement program in which the employer and/or employee makes payments to fund an employee’s retirement account. The key to this plan is the contribution rate; employee retirement benefits depend on fixed contributions and investment earnings. Profit-sharing plans, employee stock ownership plans (ESOPs), and 401(k) plans are commonly defined contribution plans. When individuals retire or change jobs, they can keep funds in the current account, withdraw the cash and use or reinvest it some other way, or do both to varying degrees. Since these plans hinge on the investment returns on previous contributions, employees’ retirement benefits are somewhat less secure and predictable. Companies can also be held liable for their management of ESOPs when the performance of stock is below what it expected or when the plan administrators breach their fiduciary responsibility. b. Typically Funded by employee and employer; Amount of benefit at retirement is determined on the basis of investment performance; investment risk borne by employee; Benefit not guaranteed; Amount of contribution is defined by employee participation level and company match; Common in private sector and nonunion workforces 34. What is the link between employee benefits and an organization’s competitive advantage? a. Benefits can be used to create and maintain a competitive advantage for the organization. While they represent a significant cost, benefits are important in attracting and retaining employees since many employees see them as a key factor when deciding what organization to join. Benefits can influence employees’ decisions about which employer to work for, whether to stay with or leave an organization, and when to retire. Employers may offer benefits to aid recruiting and retention, improve organizational performance, and meet legal requirements. Companies may utilize benefits as an effective way to recruit workers, and providing benefits such as health care, retirement support, flexible work arrangements, employee development, and health/wellness initiatives may become increasingly important in the near future. Firms can also use benefits to support company philosophy of corporate and social citizenship, and companies with more/ better benefits are seen in a more positive light. Firms must provide generous benefits to be competitive in labor markets. b. Can also be favored by employees because most benefits (except PTO) are not taxed as income to employees. The tax-favored status means that a dollar in employee benefits is actually worth much more to an employee. 35. Most common forms of managed care are PPOs and HMOs. What are they and what are the differences? a. PPOs (Preferred provider organizations)- A PPO is a type of managed care plan that offers more flexibility in choosing healthcare providers, but often at a higher cost. Members can see any doctor or specialist without a referral, including out-of-network providers (although it will usually cost more). b. HMOs (Health Maintenance Organization)- An HMO is a type of managed care plan that requires members to receive healthcare services from a network of doctors, hospitals, and other providers that have agreed to lower their rates in exchange for the HMO's business. 36. What is a consumer driven health plan? a. One of the ways employers offering healthcare benefits are controlling and reducing costs. High deductible plans are combined with other types of plans to create CDHs. CDH plans are: Health plans that provides employer financial contributions to employees to help cover their health-related expenses. They give employees ownership of their health care dollars. Pre-tax dollars from payroll are put into a HSA account for employees to use towards their healthcare costs. 37. How many weeks of leave and what type leave does FMLA require? a. The law requires employers to allow eligible employees to take a maximum of 12 weeks of unpaid, job-protected leave during any 12-month period for the following situations: Birth of a child and care for the newborn within one year of birth; Adoption or foster care placement of a child; Caring for a spouse, child, or parent with a serious health condition; Serious health condition of the employee; Military family members who must handle the affairs for military members called to active duty; Twenty-six weeks leave to care for a military servicemember injured while on active duty 38. Difference between voluntary and involuntary benefits (need to know the differences and types of each)- Employers offer a wide range of benefits. Some are mandated by laws and government regulations, while others are offered voluntarily by employers as part of their HR strategy. Involuntary (Legally Required)  a. Healthcare: COBRA & HIPAA provisions, PPACA, Medical Plans, Medicare b. Time-off benefits: Military-service leave c. Retirement Benefits- Social Security, ADEA & OWBPA provisions d. Family: FMLA provisions e. Security: Workers’ comp, unemployment compensation Voluntary f. Healthcare: Dental & vision care, Wellness Programs g. Time-off: Public-service leave, Vacation, Holidays, Bereavement Leave h. Retirement: Defined Benefit Plans, Defined Contribution Plans, 401(k) plans, Cash Balance Pension plans, Phased retirement programs i. Financial benefits: Life, disability, & long-term care insurance; Education assistance; Relocation/ homebuying assistance; Severance Pay j. Family Benefits: Domestic Partner Benefits, Adoption Benefits, Child & Elder Care 39. What are the risks of a flexible benefits plan? a. Flexible Benefits plan- Program that allows employees to select the benefits they prefer from options established by the employer. Flexible benefits systems recognize that individual employee situations differ because of age, family status, and lifestyle. b. Risks: One problem with flexibility in benefit choice is that employees may choose an inappropriate benefits package. For example, young employees may not select a retirement plan. Part of this problem can be overcome by requiring employees to select a core set of benefits (life, health, retirement, and disability insurance) and then offering options on other benefits. Another problem can be adverse selection by employees, a situation in which only higher-risk employees select and use certain benefits. Offering more choices leads to higher administrative costs for the organization. Since many flexible plans have become complex, they require more administrative time and information systems to track the choices made by employees. Chapter 13 Definitions  40. Cumulative trauma disorders- are muscle and skeletal injuries that occur when workers repetitively use the same muscles when performing tasks. Carpal tunnel syndrome, a cumulative trauma disorder, is an injury common to people who put their hands through repetitive motions such as typing, playing certain musical instruments, cutting, and sewing 41. Wellness program- Programs designed to maintain or improve employee health before problems arise 42. Ergonomics- Study and design of the work environment to address physical demands placed on individuals as they perform their jobs 43. Restricted duty- Another key to reducing these expenses are return to work plans. These plans monitor employees who are off work because of injuries and illness with the goal of having them return to do restricted duty work that is less physically demanding until they are able to perform their full range of job duties. They can save workers’ compensation costs, but employers still incur the costs of lower productivity and workload distribution issues. Also using them too much can undercut core job duties and cause problems with the ADA. Concepts 44. Different types of approaches to safety management (engineering, systems, organizational, individual)- The HR unit and operating managers share responsibility for coordinating health, safety, and security efforts. By combining organizational, engineering, and individual elements, companies can create an integrated approach to injury prevention. The most effective safety management program is one that is consistent with the organization’s culture and management philosophy. a. Engineering- Employers can prevent some accidents by designing machines, equipment, and work areas so that it is much more difficult for workers who perform potentially dangerous jobs to injure themselves and others. Providing safety equipment and guards on machinery, installing emergency switches and safety rails, keeping aisles clear, and installing adequate ventilation, lighting, heating, and air conditioning can all help make work environments safer. The use of ergonomic techniques further advances injury prevention through workstation design. For example, drones can be used in the mining industry to explore dangerous areas of caves to minimize potential harm to workers  i. Design appropriate work settings and equipment; utilize proper guarding and alert systems; Evaluate and use equipment and assistive devices; apply ergonomic principles; implement safety procedures in the workplace b. Organizational- Companies can effectively manage safety by designing safer jobs and creating policies that encourage safety. Safety committees can be used to increase awareness and involve employees in safety issues. Guidelines for accident investigations can help managers identify the causes of safety incidents. Finally, reward and recognition programs are a common method of keeping safety at the top of employees’ priority list. i. Design safe jobs; Develop and implement safety policies; Use safety committees; Coordinate accident investigations; Create a safety culture; Establish reward and recognition programs c. Individual- Industrial psychologists and human factors experts see safety differently. They address the proper match of individuals to jobs and emphasize employee training in safety methods, fatigue reduction, and health awareness. The results of many field studies involving thousands of workers show a definite relationship between human factors and occupational safety. Behavior-based safety (BBS) approaches are efforts to reduce risky behavior and increase safe behavior by defining unsafe behavior and attempting to change it. While BBS is beneficial, it does not constitute a complete approach to dealing with safety. i. Reinforce safety motivation & attitudes; Provide employee safety training; Reward safety through incentive programs; Discuss safety in meetings and at worksites 45. Steps in the accident investigation process- a. Emergency Response; Secure the accident site b. Initial investigation; Review site c. Collect data from injured worker, witnesses, historical records d. Analyze data & determine root cause e. Institute corrective measures 46. For Process Safety Management standards, what are employers required to do in regard to hazardous chemicals- OSHA has established process safety management (PSM) standards that focus on hazardous chemicals. Hazard communication standards  require manufacturers, importers, distributors, and users of hazardous chemicals to evaluate, classify, and label those substances using standardized symbols. Employers must make information about hazardous substances available to employees, their representatives, and health professionals. This information is contained in material safety data sheets (MSDSs), which must be readily accessible to those who work with chemicals and certain other dangerous substances. The MSDs contain information on antidotes or actions to take if exposed, and workers should be trained how to use them, and they should be available in all languages spoken in the workplace. 47. Early warning signs of workplace violence?; Level 2 warning signs?- a. Level 1 Early Warning Signs: intimidation/ bullying; discourteous/ disrespectful; uncooperative; verbally abusive b. Level 2 Escalating Situation: Argumentative with customers, coworkers, & management; insubordination; Sabotage of equipment/ stealing property for revenge; Verbal or written threats to hurt coworkers or managers (Can fire; maybe police involvement) c. Level 3 Further Escalation: Threats of suicide; Physical altercation; Destruction of property; Extreme rage; Brandishing weapons to harm others (fire; call police) 48. For required OSHA compliance, how many people must a company who is engage in commerce employ?- The Occupational Safety and Health Act of 1970 was enacted to ensure that the health and safety of workers would be protected. Every employer that is engaged in commerce and has one or more employees must comply with the act. 49. Child labor laws; at what age do the different provisions allow children to do?- Safety concerns affecting younger workers, especially those under the age of 18, have resulted in restrictions on the type of work they can perform and the schedules they can work. Child labor provisions in the Fair Labor Standards Act (FLSA) set the minimum age for most employment at 16 years, with some exceptions for individuals who are 14 or 15 years old. a. Any Age: Can delivery newspapers; work as an entertainer; work for family- based farm or other business that is owned and operated by their parents; Cannot work in mining or manufacturing jobs regardless of ownership b. Ages 14-15: Can work a maximum of 3 hours per day up to 18 hours per week when school is in session; Can work between 7 am and 7 pm when school is in  session; can work a maximum of 8 hours/ day up to 40 hours/ week when school is not in session; can work until 9 pm when school isn’t in session c. Ages 16-18: Can work unlimited hours in permissible jobs; May perform any farm job; May perform any nonhazardous job; May not drive on public roads or perform duties of a delivery driver d. Age 18: Minimum age for employment in hazardous occupations; No longer subject to child labor provisions 50. The steps in a security audit- A security audit is a comprehensive review of organizational security. Sometimes called a vulnerability analysis, such an audit uses managers inside the organization (e.g., the HR manager and the facilities manager) and outsiders (e.g., security consultants, police officers, fire officials, and computer security experts) to assess security issues and risks. a. Begins with a survey of the area around the facility. Factors that can be evaluated include lighting in parking lots, traffic flow, location of emergency response services, crime in the surrounding neighborhood, and the layout of the buildings and grounds Vulnerabilities in data systems have become an ever-growing issue, and cybersecurity protections should be included in the security audit. The audit may also include a review of the security available within the firm, including the capabilities of guards. Another part of the security audit reviews disaster plans, which address how to deal with events such as earthquakes, floods, tornadoes, hurricanes, and fires. b. Also control physical access to the workplace, and access to HR & other sensitive data 51. Direct costs associated with workplace accidents- a. Medical treatment (Medication, rehab, surgery); Disability benefit payments for lost time; Durable medical equipment; Workers’ Comp premiums; Fines for safety violations; Damage to work equipment 52. What are parts of the first level of health promotion?- Health promotion is Supportive approach of facilitating and encouraging healthy actions and lifestyles among employees a. First level- The first level of health promotion (information and awareness) leaves much to individual initiative for following through and making changes in actions and behaviors. Employers provide information on topics such as weight control,  stress management, nutrition, exercise, and smoking cessation. Even though such efforts may be beneficial for some employees, employers that wish to impact employees’ health must also offer second-level efforts, such as more comprehensive programs and actions that focus on employees’ lifestyle and wellness. 53. Substance abuse and the ADA- The ADA affects how management can handle substance abuse cases. Currently, users of illegal drugs are specifically excluded from the definition of disabled under the act. However, those addicted to legal substances (e.g., alcohol and prescription drugs) are considered disabled under the ADA, as are recovering substance abusers 54. What are OSHA recordables? What types of accidents are exempt?- a. Recordable injuries: b. Death: Fatality at the workplace or caused by work-related actions c. Injuries causing days away from work: Job-related injuries or disabling occurrences that cause an employee to miss regularly scheduled work on the day following the accident d. Injuries or illnesses causing job transfer or restricted duty: Job-related injuries or illnesses that lead to an employee working in a job outside his or her normal assignment e. Other recordable cases: Injuries that require treatment by a physician but do not cause an employee to miss a regularly scheduled work turn f. Exemptions: g. Very minor injuries, those not requiring first aid. h. Injuries not resulting from a work accident and/or exposure in the work environment. 55. OSHA and Farmers- Farmers with fewer than 10 employees are exempt from OSHA. 56. Best practices for safety committees in organizations- a. Leadership involvement: Senior leaders need to endorse and support safety committee efforts. Middle managers and front-line supervisors must actively assist the committee and address concerns.  b. Committee selection: To ensure commitment, employees who are already safety advocates should be assigned to the committee. Member terms should be staggered to provide a fresh perspective and continuous energy. c. Committee structure: Typically, equal representation from management and employees keeps the committee in balance. Smaller committees (up to 12 members) normally function better than do larger committees.33 Chapter 14 Definitions 57. Constructive Discharge- Process of deliberately making conditions intolerable to get an employee to quit 58. Right to Privacy- An individual’s freedom from unauthorized and unreasonable intrusion into personal affairs 59. Progressive discipline approach- Progressive discipline incorporates steps that become progressively more severe and are designed to change the employee’s inappropriate behavior. 60. Whistle-blowers- Individuals who report real or perceived wrongs committed by their coworkers or employers 61. Employee Handbook- A physical or electronic manual that explains a company’s essential policies, procedures, and employee benefits 62. Non piracy agreements- Contracts may also include nonpiracy agreements, which bar former employees from soliciting business from former customers and clients for a specified period of time. 63. Just Cause- Reasonable justification for taking employment-related action 64. Wrongful Discharge- Termination of an individual’s employment for reasons that are illegal or improper 65. Separation Agreement- Agreement in which a terminated employee agrees not to sue the employer in exchange for specified benefits 66. Interactional Justice- The extent to which a person affected by an employment decision feels treated with dignity and respect 67. Procedural Justice- Perceived fairness of the processes used to make decisions about employees  68. Distributive Justice- Perceived fairness in the distribution of outcomes 69. Open-door policy- A policy that allows workers with a complaint to talk with someone in management 70. Employee polygraph Protection act- These tests are widely used in pre-hire screening, particularly in the retail industry and others. Polygraph tests may be used as part of an internal investigation for employees who are reasonably suspected of involvement in a workplace incident (theft, embezzlement, etc.) that resulted in specific economic loss or injury to the employer. The Employee Polygraph Protection Act prohibits the use of polygraphs for most pre-employment screening and also requires that employees must: Be advised of their rights to refuse to take a polygraph exam, Be allowed to stop the exam at any time, and Not be terminated because they refuse to take a polygraph test or solely because of the exam results. Concepts 71. Who does the Privacy Act of 1974 apply to?- The Privacy Act of 1974 was enacted to protect individual privacy rights in the United States. It includes provisions affecting HR recordkeeping systems. This law applies only to federal agencies and to organizations supplying services to the federal government. 72. Definition of Employment-at-will and the exemptions to the Employment-at-Will and what each entails (Public Policy, Implied contract, Good-faith and fair-dealing, and Statutory Exemptions). - A common-law doctrine states that employers have the right to hire, fire, demote, or promote whomever they choose, unless there is a law or a contract to the contrary, and employees may quit at any time with or without notice. national restrictions on EAW include prohibitions against the use of race, age, sex, national origin, religion, and/or disabilities as bases for termination. Restrictions on other factors vary from state to state. Nearly all states have enacted one or more statutes to limit an employer’s right to discharge employees. a. Public Policy- This exception to EAW holds that employees can sue if fired for a reason that violates public policy. For example, an employee who was fired for filing a complaint with OSHA can sue the employer. b. Implied Contract- This exception to EAW holds that employees should not be fired as long as they perform their jobs. Long service, promises of continued  employment, and lack of criticism of job performance imply continuing employment. c. Good-faith & Fair Dealing- This exception to EAW suggests that a covenant of good faith and fair dealing exists between employers and at-will employees, including agreements and stipulations that appear in employee handbooks. If an employer breaks this covenant by unreasonable behavior, the employee may seek legal recourse. d. Statutory- This exception to EAW indicates that protected class characteristics cannot be used as a reason to terminate employees (i.e., religion, sex, race, etc.). 73. Why do organizations monitor the electronic communications of their employees? - The use of e-mail, social media, and text messaging has led to major issues regarding employee and workplace privacy. Employers have good reason to monitor what is said and transmitted through their Internet and voicemail systems despite employees’ concerns about free speech. Organizations want to reduce employee misconduct, protect corporate resources, prevent hacking and virus attacks, ensure productivity, and follow federal guidelines. Some companies monitor the electronic communications of employees to improve the ways that they might interact with each other in the workplace. a. Recommended actions: Develop an electronics communications policy & communicate it to employees, obtain signed permission from employees, monitor for business purposes only, Enforce the policy through disciplinary procedures 74. Drug-Free Workplace Act of 1988- The U.S. Supreme Court has ruled that certain drug-testing plans do not violate the Constitution. Private-sector programs are governed mainly by state laws, which can be a confusing hodgepodge. The Drug-Free Workplace Act of 1988 requires government contractors to take steps to eliminate employee drug use. Failure to do so can lead to disqualification for government contracts. Tobacco and alcohol do not qualify as controlled substances under the act, and off-the-job drug use is not included. 75. What is the most appropriate method for dealing with a termination?- Final Stage of Disciplinary Process. Termination occurs when an employee is removed from a job at an organization. Even though positive and progressive approaches to discipline provide employees with warnings about the seriousness of their performance problems, terminating an individual’s employment is a serious matter and should be taken only after  conferring with HR and confirming that the decision is fair and free of bias. Terminations should not take place in the heat of the moment. Even in cases that involve very serious infractions, such as an employee found drinking alcohol on the job, the employee should be suspended without pay pending an investigation. a. Use Specific termination letters to protect the organization legally, especially when using a progressive disciplinary approach. Providing specific reasons for termination can be beneficial both legally and managerially. b. However, to win wrongful termination lawsuits, employers need to follow appropriate HR processes and disciplinary procedures, as well as consistently document reasons for termination. c. Terminating an employee should be done face-to-face. Using e-mail or voicemail to terminate an employee is too impersonal but may be necessary when dealing with remote workers. 76. When are companies more likely to use a formal employment contract?- Employment contract- Formal agreement that outlines the details of employment. Companies are more likely to use a formal employment contract when employees are hired from outside the organization rather than being internally promoted, the employment situation is highly risky and uncertain, and compensation is unusually generous. Chapter 16 Definitions 77. Piggybacking- Arrangements when an organization partners with another firm that sells complementary products or services 78. Merger- Two companies that combine their businesses together to create a new business entity 79. Polycentric orientation- A strong emphasis on each country as a unique environment. Practices, culture, and policies rely heavily on what is “normal” in each country. The organization operates in a local fashion with practices varying widely among operations in different countries. 80. Ethnocentric Orientation- A strong emphasis on the home-country practices, policies, and culture. Home-country approaches dominate and operations in other countries are  typically copied from the home country. The organization operates in a standardized fashion across all countries. 81. Regiocentric orientation- Rather than emphasizing each individual nation’s uniqueness, countries are considered as aggregates within a region. European Union, North America, and Asia might represent regions where practices and policies are standardized but differ across the regions. This is a blending of the ethnocentric and regiocentric orientations. 82. Geocentric Orientation- An emphasis on utilizing the best ideas and practices from anywhere in the world. The idea is to create global mind-set that adopts ideas without regard to their origin. This approach is truly “global” in its application. 83. Joint Venture- Two or more partners who share ownership and risk in the investment 84. Globalization- The world has become much smaller with the advent of technologies that allow for easy communication and sharing of information. Open border policies in many nations encourage the exchange of goods and services across nations. Most countries participate in the world economy beyond their own domestic markets. Concepts 85. All of Geert Hofstede Cultural dimensions and the definitions of each dimension- a. Power distance index (PDI) refers to the inequality among the people of a country. High power distances lead to a hierarchical society, while low power distances are more egalitarian. b. Individualism versus collectivism (IDV) is the extent to which people in a society prefer to act as individuals or as members of a group. High scores on this dimension reflect emphasis on “I,” while low scores reflect an emphasis on “We.” c. Masculinity versus femininity (MAS) dimension refers to the preference for competition versus cooperation. High scores indicate a more aggressive, competitive culture; low scores indicate a more nurturing, cooperative culture. d. Uncertainty avoidance (UAI) is the level of comfort people in the society feel regarding ambiguity and the future. High scores mean that the society will try to control behavior as much as possible, while low scores mean a more relaxed outlook. e. Long-term orientation (LTO) dimension refers to the emphasis on the future or the present and past. Societies high in LTO value thrift and persistence, and those favoring short-term orientation will respect fulfilling social obligations.  f. Indulgence versus restraint (IND) dimension reflects free gratification or behavioral constraint within the society. High scores are found in societies where people are open and free and pursue gratification of their wants and desires. Low scores lead to regulation and suppression of individual desires. 86. What signals are multi-national enterprises (MNE) trying to send when they employ host-country nationals? a. A host-country national is an employee working in their home country for a firm that is headquartered in a different country. Citizens of country hosting the foreign subsidiary. Ex) Chinese employee working in China for a U.S. firm. b. This clearly conveys the message that the MNE is making a commitment to the host country. Host-country nationals know the culture, politics, laws, and business customs better than outsiders. Additionally, using host-country nationals provides employment in the host country, an important consideration particularly in developing economies. 87. What is the riskiest business form (Franchising, piggybacking, a joint venture, a licensing arrangement)? - a. Equity business forms include joint ventures, mergers & acquisitions, and direct investment. Organizations that undertake more serious international expansion may determine that financial and human investments are needed to truly achieve their international objectives. These are more risky and involve more HR considerations. Joint ventures, mergers, and acquisitions present special challenges when the partners are headquartered in different countries. Tax regulations, intellectual property laws and practices, and employment-related issues add to the obstacles in bringing together two unique businesses into one operation. Human resource and organization culture aspects often play a key role in the eventual success or failure of these business formations 88. What do well established legal systems do in relation to globalization? - a. Firms in the United States, Europe, and elsewhere are accustomed to relatively stable political and legal systems. Although elected officials may change over time, the well-established legal systems offer continuity and consistency for global firms. However, many nations function under turbulent and varied legal and political systems. Countries such as Venezuela, Cuba, and Zimbabwe have  been run by individuals who have repressed their economic and social development, making them unattractive for global organizations. b. Well Established legal systems make globalization easier and make countries more attractive to firms. 89. Common first step in expanding globally by using non-equity business approaches? a. In general, non-equity approaches demand little from the headquarters HR staff. Non-equity business forms include importing and exporting, licensing & franchising, and piggybacking. These business forms provide a low-cost entry into new, global markets. The organization may begin global expansion with limited investment and risk to determine if operating outside of the home market is viable. b. A common first step in expanding globally is to simply buy and sell goods and services to customers outside of the home country through importing and exporting. 90. Emotional, behavioral, and cognitive components of intercultural competence training (definitions; compare and contrast)- Global employers are providing intercultural competence training for employees sent abroad and those who manage workers in multiple countries. Of particular importance is providing training to managers who oversee workers in several countries. Training includes educating managers to recognize how the various laws, customs, and practices in each nation impact manager– employee relationships. a. Emotional- How does the person view other cultures, and how sensitive is the person to cultural customs and issues? Possible training: i. Uneasiness: Social skills training focusing on new, unclear, and intercultural situations ii. Prejudices: Coaching may be clarifying iii. Sensitivity: Communication skills course (active listening, verbal/nonverbal cues, empathy) b. Behavioral- How does the person act in intercultural situations? Possible Training: i. Culture assimilator method ii. International projects  iii. Social skills training focusing on intercultural situations c. Cognitive- What does the person know about other cultures? Possible Training: i. Culture-specific training (traditions, history, cultural customs, etc.) ii. Language course 91. North America Free Trade Agreement- This agreement promotes free trade between Canada, Mexico, and the United States. Gross domestic product of these combined countries exceeds $20 trillion and, therefore, commerce without tariffs or restrictions has become important to all three nations. Some critics say that it has encouraged employers to relocate jobs to Mexico where pay is much lower than in the United States. Conversely, cheaper food from Mexico has kept U.S. grocery prices lower. The NAFTA agreement is subject to renegotiation due to an Executive Order issued in 2017. Companies with operations throughout the North American continent will need to respond to any changes brought about by a revised agreement. 92. What should repatriation focus on for employees? - a. companies should consider providing expatriates flexible assignments, mentoring efforts, meetings with key managers, career support, and guarantees of temporary employment if they complete their foreign assignments early. Repatriation efforts should include some focus on the individual employee’s needs and career aspirations and building organizational support to capitalize on the enhanced knowledge base of repatriating workers 93. What is the general age make-up of populations around the world? What are the general demographic trends? - a. Population growth has been declining in many developed nations around the world, and people above the age of 65 are becoming a larger share of the world population. b. Migration of working-age individuals from less-developed countries to more developed countries can bolster economic growth and progress. Immigration policies by each nation significantly impact the inflow of people into a country and its economic health. 94. What are the main concern of the critics of globalization? - a. Critics of globalization cite the extremely low wage rates paid by some international firms and the substandard working conditions that exist in some  underdeveloped countries–for example, those found in H&M and Gap clothing factories in Asia. Some global employers have made efforts to ensure that foreign factories adhere to higher HR standards, but others have not. 95. Differences between home-country approach and host-country approach to compensation- a. Home-Country Approach- The home-country-based approach is the most commonly used method. The overall objective is to maintain the standard of living the expatriate had in the home country. Housing, taxes, and discretionary spending expenses are calculated based on those items in the home country. The company then pays the expatriate the difference so that he or she “remains whole.” The home-country approach can result in higher employer costs and more administrative complexity than other plans. b. Host-Country Approach- The host-country-based approach compensates the expatriate at the same level as workers from the host country. The company might continue to cover the employee in its retirement plan and also provide a housing allowance. If the cost of living is substantially lower in the host country than in the home country, this approach might make sense because the expatriate can live comfortably while on assignment and can more effectively acclimate to the culture of the host country. 96. What orientations match to which approaches? - a. Ethnocentric- Home-country approach b. Polycentric- Host-country approach