HRM 361 – Human Resource Management
Final Exam Study Guide
Chapter 11 – Compensation
What is total rewards
How is it different than traditional compensation
Why compensation philosophies vary by organization
Entitlement vs. performance philosophies
Intrinsic vs. extrinsic rewards- Intrinsic rewards may include praise for completing a project or meeting performance objectives. Other psychological and social forms of compensation also reflect intrinsic type of rewards. Extrinsic rewards are tangible and take both monetary and nonmonetary forms.
Role of the HR unit in compensation
Exempt / nonexempt
5 categories of exempt employees
Training & travel time
How to classify
Tax implications for employers / employees
Market pricing and pros/cons
Red/green circle employees
Pay adjustments (e.g. seniority)
Chapter 12 – Incentives
Variable pay philosophy
How variable pay motivates employees
3 categories of variable pay
Types of individual incentives
Gainsharing and how different from profit sharing
3 types of commission pay plans and which is the most common Examples of performance incentives
Why incentives should be tied to organizational goals
Pros/cons of bonuses vs. merit pay
Chapter 13 – Benefits
why employers offer benefits
employee choice in benefits selection
personal statement of benefits
legally required benefits and discretionary benefits
workers’ compensation / unemployment / severance
recent trends in healthcare insurance
HMO / PPO / POS
Health savings accounts
Defined contribution / defined benefit plans
Qualifying events under COBRA
Vacation / sick leave / PTO
Total rewards- Monetary and non-monetary rewards to attract, motivate, and retain employees. *differs in traditional approach see figure 11-3 (base pay, bonuses are for execs, etc) Compensation philo varies by organization- IN BOOK???
Entitlement (seniority based comp, across the board raises, pay increased annually, holiday bonuses to all employees, industry comparisons only) Versus Performance (no raises for length of service or poor performance, market adjusted structures, pay linked to performance targets, broader industry comparisons)
Role of HR in comp- Develop/administer pay system, evaluate jobs/analyze pay surveys, develop pay structures/policies. Internal and External equity – In Book????
Meet/lag/lead strategies- In book???
FLSA - Exempt / nonexempt, Overtime, Training & travel time
5 categories of exempt employees- Executive, admin, Professional (doctors, etc), computer employee, and outside sales. Classify indep contractors- Behavioral control, financial control, and relationship type factors. Market pricing (PROS)- ties organiza. pay levels to the external job market without internal job evaluation distortion. Also communicates to employees that the compensation system is “market linked”. (CONS) Relies on market survey data, a specific job may differ from a “matching” job in the survey, the market’s scope is a concern, tying pay levels to market data can lead to wide fluctuations. Pay grades- groupings of individual jobs having approx the same job worth. Red/Green circle employees- “rates out of range”: RED circled-current job holder being paid ABOVE the range set for the job. GREEN circled.. being paid BELOW … Pay adjustments- Seniority, Cost of living adjustments (COLA), Across the board increases, Lump sum increases (LSI).
Variable pay philo- compensation linked to individual, group/team, and/or organizational performance. (some perform better than others, total compensation should be tied directly to performance results, better employees should receive more money, some jobs contribute to business than others). Performance incentives: trips, merchandise, ESOP, bonuses, praise, profit...
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