Human Resources Test 3 Study Guide PDF

Human Resources Test 3 Study Guide Chapter 10 Performance Management Systems Performance management systems: designed to motivate employees to perform their best They evaluate employee effort, compare it to the standards, and use the results to help employees to improve Fou...

Human Resources Test 3 Study Guide Chapter 10 Performance Management Systems Performance management systems: designed to motivate employees to perform their best They evaluate employee effort, compare it to the standards, and use the results to help employees to improve Four main purposes: o Goal setting and feedback o Motivation and development o Documentation o Talent management Performance appraisals: key part of performance management systems They provide feedback to employees on their progress toward achieving goals Documentation is necessary for legal purposes to justify disciplinary actions or terminations Talent management practices: help organizations identify and develop high-potential employees Appraisal Process Structured way to communicate with employees about their performance Six steps: o Establish performance standards o Communicate expectations o Measure actual performance o Compare actual performance with standards o Discuss appraisal with the employee o Initiate corrective action if needed Methods for Evaluating Performance Three common approaches to evaluating employee performance: o Absolute standards o Relative standards o Outcome-based evaluation Absolute standards: compare employees to a set of standards relevant to their job description Types include: o Critical incident appraisal: key behaviors o Checklist appraisal: evaluator checks off applicable attributes o Graphic rating scale: lists traits and a range of performance for each o Forced- choice appraisal: requires the rater to choose between two or more sentences o Behaviorally anchored rating scale (BARS): uses examples of actual work behavior to rate employees Relative standards: compare employees to each other Types include: o Group-order ranking o Individual ranking o Paired comparison Outcome-based evaluation focuses on the results that employees achieve Management by Objectives (MBO): popular outcome-based evaluation method o Involves setting SMART goals, then evaluating employees on how well they meet those goals Factors that Distort Appraisals Several things can distort appraisals making them less accurate and effective, including: o Leniency error: being lenient or too harsh in evaluating employees o Halo error: letting one + or – trait influence the entire evaluation o Similarity error: rating employees based on how similar they are to the evaluator o Low appraiser motivation: not being motivated to give accurate appraisals; could have negative consequences for the employee o Central tendency: avoiding extreme ends of the rating scale o Inflationary pressures: feeling pressured to give high ratings to avoid conflict or negative consequences o Inappropriate substitutes for performance: using criteria that are not related to job performance o Attribution theory: explaining an employee’s performance based on internal or external factors Creating More Effective Performance Management Systems Use behavior-based methods Combine absolute and relative standards Provide ongoing feedback Use multiple raters: o Self-appraisals, peer evaluations, upward appraisals, and 360-degree appraisals Rate selectivity: only evaluate aspects of the job they are familiar with Train appraisers The Performance Appraisal Meeting An important opportunity to discuss performance with the employee to make it successful, managers should: o Prepare and schedule the meeting in advance o Explain the purpose of the meeting in advance o Describe the purpose of the appraisal o Involve the employee in the appraisal discussion o Focus the discussion on work behaviors o Support the evaluation with examples o Give both + and – feedback o Check for understanding o Generate a development plan International performance appraisals Evaluating employee performance in international environments can be complex Organizations need to consider cultural differences when developing and implementing performance management systems & need to decide who will perform the evaluations Chapter 11 Total rewards compensation: comprehensive approach to employee compensation that considers pay, training, benefits, time off, work-life balance, challenging work assignments, work culture, autonomy, and advancement opportunities. o A well- designed total rewards strategy can help organizations attract, retain, and motivate qualified employees. Employee compensation can be classified in many ways:  o Intrinsic vs extrinsic o Financial vs non-financial rewards o Performance- based vs membership-based rewards Key legislation and regulations Fair Labor Standards Act (FLSA) of 1938: sets requirements for minimum wage, overtime pay, record keeping, and child labor; establishes the distinction between exempt and nonexempt employees Walsh-Healy Act: government contractors are required to pay prevailing wage rates Civil Rights Act, Equal Pay Act & Lilly Ledbetter Fair Pay Act: work together to prevent pay discrimination External Factors Affecting Compensation Geographical differences: wages are product of labor supply and demand; wages tend to be higher in areas with a shortage of qualified workers Labor supply: significantly impacts compensation; a tight labor market with low unemployment, employers will need to offer higher wages to attract and retain employees Compensation practices of their competitors: employers can choose to match, lead or lag the market Collective bargaining: influences wages and benefits; unionized organizations often have higher compensation levels Compensation Administration The process of managing an organization’s compensation program including evaluating positions, designing a pay structure, and communicating compensation policies to employees Job evaluation: systematic process that determines the relative value of each job in an organization; used to create a pay structure that is fair and equitable o Ranking method o Classification method o Point method Compensation Surveys and Wage Structures Compensation surveys: tools that gather data on pay practice in specific industries and geographic locations; used to ensure that an organization’s pay structure is competitive Wage curve: graphical representation of the relationship between job evaluation points and pay rates; helps organizations to identify jobs that are overpaid or underpaid relative to the market Wage structure: organizes jobs into pay grades with a range of possible pay rates; designed to ensure that jobs of similar value are paid similarly Types of Compensation Base pay: foundation of an employee’s compensation and is determined by the job evaluation process; paid as an hourly wage, salary, or piecework rate Premium pay: additional compensation paid to employees for work that is undesirable, hazardous or inconvenient, i.e. overtime, shift differential pay, on-call, and hazard pay Variable pay: linked to individual group or organizational performance; designed to incentivize employees to achieve specific goals Individual incentives: o Commissions o Bonuses o Merit- pay  Competency-based compensation: rewards employees for mastering skills, knowledge, and behaviors relevant to their positions; uses broad banding which is where jobs are grouped into a few wide pay bands Team-based compensation: rewards employees for the performance of their team; encourages cooperation Organization- wide incentives: gainsharing and profit-sharing plans; encourages employees to work towards common org. goals o Scanlon plan and Improshare: types of organization-wide incentive plans Executive Compensation Set by an organization’s board of directors and is designed to attract and retain top talent Often include a mix of base salary, short-term incentives(bonuses), long-term incentives(stocks) and perquisites(perks) Stock options: give executives the right to purchase company stock at a specific price; allows them to profit from increases in the company’s stock value Golden parachutes: financial protection provided to executives in the event of a merger, acquisition, or other major organizational changes International Compensation Need to develop compensation programs that consider the unique factors of each country (cost of living, taxes, currency exchange rates, & labor laws) Balance sheet approach: common method for determining compensation for expatriate employees; aims to maintain a comparable standard of living to what they would have in their home country Compensation packages usually include: o Base pay o Differentials: offset higher living costs o Hardship differentials: challenging locations o Incentives: encourage employees to accept overseas assignments o Assistance programs: help employees with relocation and other needs Chapter 12 Effective Use of Benefits Total rewards: comprehensive view of compensation that includes pay, training, health and wellness management, benefits, paid time off (PTO), and nonmonetary rewards such as work-life balance, challenging work, a supportive work culture, autonomy, and opportunities for advancement Salary and benefits are the largest business expense in many industries Employee benefits: membership-based, nonfinancial rewards offered to attract and keep employees Benefits play a significant role in achieving strategic goals for employers Organizations can use data analytics to track the impact of benefits and policies Benefit Planning Should reflect the strategic human resource (HR) goals of the organization Employee involvement in selecting benefits can lead to better understanding of the cost of benefits and satisfaction with the packages Employers can offer a wide variety of benefits that offer flexibility, quality of work-life, and financial security. Domestic partner benefits: offered to an employee’s live-in partner Communicating Benefits to Employees  Effective benefits administration requires a communication strategy Salaries paid to employees are only 70% of the compensation costs; the other 30% is the cost of required and voluntary benefits Open enrollment: key event in the yearly functions of an organization’s HR department; is one of the busiest periods of the year for HR Enrolling Employees in Benefits Open enrollment period: time frame for employees to sign up for healthcare insurance and other befits for the next year Qualifying events: life events that allow for an exception to the open enrollment deadline Legally Required Benefits Employee benefits mandated by law Hiring an employee requires the organization to pay Social Security premiums, unemployment compensation, and workers’ compensation Most organizations with 50 or more employees must provide FMLA (Family and Medical Leave) Social Security Provides retirement, disability, and survivor benefits paid by the government to the elderly, former members of the labor force, and disabled, or their survivors Financed by employee contributions matched by the employer Never intended to be employees’ sole source of retirement income Unemployment Compensation Employee insurance that provides some income continuation in the even an employee is laid off Funds for paying unemployment come from combined federal and state taxes imposed on the taxable wage base of the employer State unemployment tax depends upon a company’s unemployment experience Unemployment and parallel programs cover more than 75% of the workforce Workers’ Compensation Employee insurance that provides income continuation if a worker is injured on the job Entire cost of workers’ comp. is covered by the organization Most workers’ comp. plans allow employers to choose the medical care provided for injuries but allow workers to request alternative care Family and Medical Leave Act (FMLA) of 1993 Provides employee the opportunity to take up to 12 weeks unpaid leave each year for family or medical reasons Health Insurance Continuation Consolidated Omnibus Budget Reconciliation Act (COBRA): provides continued employee benefits up to 3 years after an employee leaves a job COBRA allows private-sector employees to continue health insurance benefits for 18 months after leaving the organization Employers must notify employees within 30 days of the layoff or reduction in hours that qualified the employee for COBRA benefits HIPAA Requirement Health Insurance Portability and Accountability Act (HIPAA): ensures confidentiality of employee health information Patient Protection and Affordable Care Act  PPAC: reforms healthcare insurance system in the United States by expanding the availability and regulation of health insurance coverage and making significant changes to how health insurance coverage is provided and paid for Voluntary Benefits Employers who offer voluntary benefits, use this as a strategic move Healthcare benefits are highly regarded by prospective employees Health Insurance Protects form financial disaster in case of a major illness The average annual premiums for employer-sponsored health insurance are $7,470 for single coverage and $21,342 for family coverage Preferred Provider Organizations (PPOs) Organizations that require using specific physicians and healthcare facilities to contain the rising cost of healthcare Most common plan provided by employers High Deductible Health Plan (HDHP) A health plan with low premiums and high deductibles Deductible: amount that the insured employee pays for medical expenses out of pocket before insurance pays the remaining expenses Usually linked to a consumer-driven health plan (CDHP): combines a health plan with a high deductible with a health savings account that the insured uses to pay for deductibles and medical care o Health savings account (HSA): savings account with tax advantages used to pay out-of- pocket medical expenses and deductibles o Health reimbursement arrangement (HRA): employer funded plan that reimburses employees for qualified medical expenses o Flexible spending accounts (FSA): allows employees to set aside money before payroll taxes to pay for healthcare or dependent care Health Maintenance Organizations (HMOs) Provide comprehensive health services for a flat fee Require employees to choose a primary care physician who has a contract with the HMO Point of Service (POS) Healthcare plan that includes primary care physicians but allows greater flexibility for using services out of the network Disability Insurance Short-term: pays a percentage of employee salary if a disability requires missing work for up to 6 months Long-term: provides replacement income for an employee who cannot return to work and whose short-term coverage has expired Group Term Life Insurance Employers may offer a small amount of group term life insurance to full-time employees Other popular benefits Dental and vision insurance Tuition reimbursement Employee assistance programs (EAPs): provide confidential counseling and referral services for a wide range of employee issues Wellness programs: organizational programs designed to keep employees healthy  Pet insurance Travel insurance Charitable contribution Offering Choices to Employees Flexible benefits, or cafeteria plan benefits, are programs in which employes pick benefits that most meet their needs Retirement Benefits Retirement plans can be a way to attract qualified employees of all ages Employee Retirement Income Security Act (ERISA) Law passed in 1974; designed to protect employee retirement benefits Requires employer to keep pension plan assets separate from business assets Summary plan description (SPD): an ERISA requirement of explaining to employees their pension program and rights Vesting rights: permanent right to pension benefits Pension Benefit Guaranty Corporation (PBGC): organization that lays claim to corporate assets to pay or fund inadequate pension programs Defined Benefit Plans Retirement program that pays retiring employees a fixed retirement income based on average earnings Funded by contributions by employee and employer into a trust fund Defined Contribution Plans Retirement account depends on the growth of contributions of employee and employer Funded by employer and employee contributions; no specific amount of retirement income is promised Money Purchase Pension Plans Organization commits to deposit an annually fixed amount of money or a percentage of employee’s pay into a fund Profit-sharing Plans Company contributes a percentage of each worker’s pay to a trust fund account Individual Retirement Accounts IRAs: type of defined contribution plan with employer contributions o Simplified employee pension plan IRA (SEP IRA): allows a small business owner to contribute up to 25% of an employee’s compensation into an IRA o Savings incentive match plan for employees IRA (SIMPLE IRA): allows employer that have no retirement plan and 100 or fewer employees to contribute to an IRA 401(k)s Permit workers to set aside a certain amount of their income for retirement savings through their employer Many companies match employee contributions up to a max. percentage Not taxed as income until the employee withdraws them Leave Benefits Employers have a variety of plans to let employees take paid and unpaid time off Paid Time Off (PTO) Plan combines vacation, sick leave, personal days, or nearly any other reason for needing time off into one account managed by employees Accrued according to the amount of time employees worked and the employees’ position Vacation and Holiday Leave The U.S. is one of the few developed countries that does not require employers to offer any paid vacation time When vacation and paid holidays are combined, Austria leads the world with 38 total paid days off each year. Although no paid leave is required in the United States, employees average 10 paid vacation days after the first year of employment. Sick Leave Typically accumulated at a specific number of days for each year of service Benefits in a Global Environment Benefits packages offered in other countries are often tailored specifically to the countries unique culture, government regulations, and competition for the best employees. Popular categories of employee benefits vary widely when applied to a global workforce. o Leaves provide some of the biggest differences in benefits that governments require employers to offer. o Healthcare is a government-provided benefit in many countries. o Pension Plans like defined benefit plans or Social Security are provided by many governments. Chapter 13 Occupational Safety and Health Act (OSHA) of 1970 Created to ensure safe and healthy work conditions for employees by establishing and enforcing standards & providing training and resources Applies to almost every U.S. business involved in interstate commerce; some states have their own programs, but their standards must be at least as effective as federal standards Has helped to reduce annual workplace fatalities from 14,000 in 1970 to 5,200 today OSHA Standards Provides safety standards for four main types of employers: o General industry o Construction o Agriculture o Maritime General industry standards affect a wide range of employers and include areas: o Exit routes and emergency planning o Preventing falls o Occupational health and environmental control o Hazardous material o Personal protective equipment (PPE) o Medical services and first aid o Fire protection o Materials handling and storage o Machinery and machine guarding o Special industries o Toxic and hazardous substances Employers are required to provide employees with: o Access to medical records  o Records of employee exposure to toxic substances o Necessary PPE and training o Information about hazardous materials in the workplace Key requirements of OSHA standards: o Safety data sheets (SDS): documents that detail information about hazardous substances, including safe handling, storage, and emergency procedures o Lockout/tagout: procedure to disable equipment during maintenance, preventing accidental startup o Confined space entry: procedures to ensure worker safety when entering areas not designed for human occupancy The General Duty Clause: any dangerous or unhealthy workplace conditions not addressed by specific industry regulations; allows OSHA to regulate a wide range of workplace activities OSHA Record- Keeping Employers in high-risk industries must keep records of workplace injuries and illnesses Key OSHA forms: o Form 300: log of work-related injuries and illnesses o Form 300a: summary of work-related injuries and illnesses o Form 301: injury and illness incident report Employers must report: o Work-related fatalities within 8 hours o Incidents requiring hospitalization of three or more employees within 24 hours The incidence rate is used to determine the frequency of workplace injuries and illnesses Diversity and Safety Research shows that Latino immigrant men have the highest rate of workplace injury, followed by African American men and U.S.-born Latino men Possible reasons for these disparities: o Assigning minority groups to riskier tasks o Lower rates of promotion to safer positions Language barriers, cultural differences, and lack of training can also impact safety for minority workers Stress from harassment or discrimination creates distractions that can make workers more vulnerable to accidents OSHA Inspection and Enforcement Due to limited resources, OSHA prioritizes its investigations Inspection priorities, from highest to lowest: o Imminent danger: a situation where an accident is likely to occur imminently o Severe injuries or illnesses: fatalities and incidents involving hospitalization must be reported promptly o Worker complaints: employees can file complaints with OSHA and may refuse to work in dangerous conditions o Referrals: other agencies, individuals, or media reports can lead to investigations o Targeted inspections: focus on high-risk industries o Follow-up inspections: ensures corrective action has been taken Inspection process: o Inspector credentials: the OSHA officer presents their credentials and explains the reason for the inspection  o Opening conference: purpose and scope of the inspection are discussed o Inspection tour: officer examines the workplace, talks to employees, and may take photographs o Closing conference: officer reviews findings and potential violations OSHA penalties vary depending on the severity of the violation and the employer’s history: o Willful violations: employer knowingly ignored regulations o Serous violations: hazards could cause serious injury or death o Repeated violations: similar violations found in previous inspections o Other-than-serious violations: unlikely to cause serious harm OSHA’s top 10 most common workplace safety violations provide a framework for creating a safer work environment Creating a Safe Work Environment Key components of a safe work environment: o Management commitment to safety o Employee involvement is safety initiatives o Worksite analysis to identify hazards o Hazard prevention and control measures o Training for employees, supervisors, and managers o Effective use of PPE OSHA provides numerous resources to assist employers: o A comprehensive website with information in English and Spanish o Downloadable forms and templates o Training programs and materials Health and Safety Issues Current health and safety challenges in the workplace: o Pandemics o Distracted driving o Workplace violence o Opioid abuse o Bullying o Indoor air quality o Smoke-free environments o Marijuana use o Musculoskeletal disorders (MSDs) o Stress Employers have a responsibility to address these issues to ensure worker well-being and productivity International Safety and Health Employers sending workers abroad must comply with OSHA’s General Duty Clause to protect employees from harm Key considerations: o Legal and regulatory compliance: employers must understand and comply with local laws and regulations o Cultural sensitivity: employees need to be aware of local customs and expectations o Safety and security: measures should be in place to ensure employee well-being is potentially higher risk environments International health concerns include vaccinations, access to healthcare and emergency plans Chapter 14 Why Employees Join Unions Higher wages and benefits: unions leverage collective bargaining power to negotiate higher wages and more comprehensive benefit packages for their members Greater job security: unions offer protection against arbitrary employer actions, establishing procedures for discipline, promotion, demotion, and firing Influence over work rules: through grievance procedures and collective bargaining, unions give workers a voice in determining working conditions Dissatisfaction with management: employees may seek union representation when they feel that management is unresponsive, unfair, or disrespectful Laws Governing Labor-Management Relations National Labor Relations Act (Wagner Act) of 1935: guarantees worker the right to organize and join unions, bargain collectively, and strike. The act created the National Labor Relations Board (NLRB) to oversee union elections and prevent unfair labor practices by employers. Labor Management Relations Act (Taft-Hartley Act) of 1947: amended the Wagner Act by addressing employers’ concerns and outlining unfair labor practices by unions. Established the Federal Mediation and Conciliation Service (FMCS) to assist in resolving labor disputes Other Key Labor Laws Railway Labor Act of 1926: regulates union activity for railway and airline workers, establishing dispute settlement procedures to minimized disruptions in transportation Landrum-Griffin Act (Labor Management Reporting and Disclosure Act): aims to prevent union corruption by requiring financial transparency and democratic processes within unions Executive Orders 10988 and 11491: presidential orders granted federal employees the right to join unions and bargain collectively Civil Service Reform Act of 1978: established the Federal Labor Relations Authority (FLRA) to administer labor relations for nonpostal federal employees The Racketeer Influenced and Corrupt Organizations Act (RICO) of 1970: combats organized crime influence on unions by allowing for asset seizure Unionizing Employees Organizing campaign: the process employees follow to request union representation Steps in the union-organizing process: o Preparation: employees show signs of dissatisfaction and interest in unionization o Authorization card campaign: unions collect signed authorization cards from employees o Petition to NLRB: the union petitions the NLRB for recognition after securing enough authorization cards o NLRB Election: conducts a secret ballot election to determine union representation o Certification: the NLRB certifies the union if it wins the election o Decertification: employees can vote to decertify a union through a representation decertification (RD) election Collective Bargaining The process of negotiating terms of employment between an employer and a union representing employees Steps in the collective bargaining process: o Preparation: both parties gather info and set goals o Negotiation: union presents demands, and both sides make proposals and counterproposals o Agreement: a contract is reached and ratified by union members o Impasse: negotiations break down, potentially leading to a strike or lockout o Impasse-resolution techniques: third-party intervention through conciliation, mediation, fact- finding, or arbitration may be used Contract Administration Communicate contract provisions: ensure all parties understand the agreement Implement the contract: apply the contract consistently  Grievance process: follow procedures outlined in the contract to resolve disputes Monitoring activities: track the contract’s impact on the company and workers Critical Issues for Unions Today Declining Union Membership: factors include changes in economy. Employer opposition, and right- to-work laws Labor-management cooperation: both sides recognize the need for collaboration to improve productivity and competitiveness Public sector unionization: union membership remains strong in the public sector International Labor Relations Differing labor laws and practices: understand the legal and cultural context of labor relations in different countries o Global or local control: determine whether labor relations should be managed centrally or locally o National attitudes towards unions: recognize variations in employer and society perspectives on unions The European Union: labor relations in the EU are influenced by diverse national systems and economic challenges China: the ACFTU is the sole legal union federation, but independent unions are emerging