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International Pay Systems

Task description:

Globalization has become a fact of life for many organizations and their employees. However, globalization brings with it a myriad of issues.

Write an analysis detailing international pay systems and their adherence and/or lack thereof to United States laws regarding compensationpractices and policies, such as the FLSA, the Pay Discrimination Act, and others. Include in this analysis the means to control salary budgets when dealing with the multitude of issues in the global market place and salary issues. Your paper should demonstrate thoughtful consideration of the ideas and concepts of international pay systems and provide new thoughts and insights relating directly to this topic.

Attached resources MUST be used, References to laws MUST be done.

In addition, otehr references can be used.

HUMAN

RESOURCE

MANAGEMENT

Boston Columbus Indianapolis New York San Francisco Upper Saddle River

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THIRTEENTH EDITION

GARY DESSLER FLORIDA INTERNATIONAL UNIVERSITY

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Library of Congress Cataloging-in-Publication Data

Dessler, Gary

Human resource management/Gary Dessler. 13th ed.

p. cm.

Includes bibliographical references and index.

ISBN-13: 978-0-13-266821-7 (hardcover: alk. paper)

ISBN-10: 0-13-266821-1 (hardcover: alk. paper)

1. Personnel management. I. Title.

HF5549.D4379 2012

658.3 dc23

2011037044

ISBN 10: 0-13-266821-1

ISBN 13: 978-0-13-266821-7

10 9 8 7 6 5 4 3 2 1

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DEDICATED TO SAMANTHA AND TAYLOR

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B R I E F C O N T E N T S

PART ONE INTRODUCTION 2

1 Introduction to Human Resource Management 2

2 Equal Opportunity and the Law 30

3 Human Resource Management Strategy and Analysis 70

PART TWO RECRUITMENT, PLACEMENT, AND TALENT

MANAGEMENT 102

4 Job Analysis and the Talent Management Process 102

5 Personnel Planning and Recruiting 136

6 Employee Testing and Selection 174

7 Interviewing Candidates 212

PART THREE TRAINING AND DEVELOPMENT 242

8 Training and Developing Employees 242

9 Performance Management and Appraisal 282

10 Employee Retention, Engagement, and Careers 320

PART FOUR COMPENSATION 350

11 Establishing Strategic Pay Plans 350

12 Pay for Performance and Financial Incentives 390

13 Benefits and Services 422

PART FIVE EMPLOYEE RELATIONS 458

14 Ethics and Employee Rights and Discipline 458

15 Labor Relations and Collective Bargaining 494

16 Employee Safety and Health 530

17 Managing Global Human Resources 576

18 Managing Human Resources in Small and Entrepreneurial Firms 604

APPENDICES

APPENDIX A PHR and SPHR Knowledge Base 633

APPENDIX B Comprehensive Cases 641

V

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C O N T E N T S

Preface xxiii

Acknowledgments xxvii

PART ONE INTRODUCTION 2

1 Introduction to Human Resource Management 2 WHAT IS HUMAN RESOURCE MANAGEMENT AND WHY IS IT IMPORTANT? 4

What Is Human Resource Management? 4

Why Is Human Resource Management Important to All Managers? 5

Line and Staff Aspects of Human Resource Management 6

Line Managers Human Resource Duties 7

Human Resource Manager s Duties 7

New Approaches to Organizing HR 9

Cooperative Line and Staff HR Management: An Example 9

THE TRENDS SHAPING HUMAN RESOURCE MANAGEMENT 10

Globalization and Competition Trends 11

Indebtedness ( Leverage ) and Deregulation 12

Technological Trends 12

Trends in the Nature of Work 13

* HR AS A PROFIT CENTER: Boosting Customer Service 14

Workforce and Demographic Trends 14

Economic Challenges and Trends 16

THE NEW HUMAN RESOURCE MANAGERS 17

Human Resource Management Yesterday and Today 17

They Focus More on Strategic, Big Picture Issues 17

* THE STRATEGIC CONTEXT: Building L.L.Bean 17

They Use New Ways to Provide Transactional Services 18

They Take an Integrated, Talent Management Approach to Managing

Human Resources 19

They Manage Ethics 19

They Manage Employee Engagement 19

They Measure HR Performance and Results 19

They Use Evidence-Based Human Resource Management 20

They Add Value 20

They Have New Competencies 21

HR Certification 22

THE PLAN OF THIS BOOK 22

The Basic Themes and Features 22

CHAPTER CONTENTS OVERVIEW 23

Part 1: Introduction 23

Part 2: Recruitment, Placement, and Talent Management 23

Part 3: Training and Development 23

Part 4: Compensation 23

Part 5: Employee Relations 23

The Topics Are Interrelated 24

CHAPTER SECTION SUMMARIES 25

DISCUSSION QUESTIONS 25

INDIVIDUAL AND GROUP ACTIVITIES 26

EXPERIENTIAL EXERCISE: HELPING THE DONALD 26

APPLICATION CASE: JACK NELSON S PROBLEM 27

CONTINUING CASE: CARTER CLEANING COMPANY 27

KEY TERMS 28

ENDNOTES 28

VII

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2 Equal Opportunity and the Law 30 EQUAL EMPLOYMENT OPPORTUNITY 1964 1991 32

Title VII of the 1964 Civil Rights Act 32

Executive Orders 32

Equal Pay Act of 1963 33

Age Discrimination in Employment Act of 1967 33

Vocational Rehabilitation Act of 1973 33

Pregnancy Discrimination Act of 1978 34

Federal Agency Guidelines 34

Early Court Decisions Regarding Equal Employment Opportunity 34

EQUAL EMPLOYMENT OPPORTUNITY 1990 91 PRESENT 35

The Civil Rights Act of 1991 35

The Americans with Disabilities Act 36

Genetic Information Nondiscrimination Act of 2008 (GINA) 39

State and Local Equal Employment Opportunity Laws 39

Sexual Harassment 39

DEFENSES AGAINST DISCRIMINATION ALLEGATIONS 43

The Central Role of Adverse Impact 44

Bona Fide Occupational Qualification 46

Business Necessity 47

Other Considerations in Discriminatory Practice Defenses 48

ILLUSTRATIVE DISCRIMINATORY EMPLOYMENT PRACTICES 48

A Note on What You Can and Cannot Do 48

Recruitment 49

Selection Standards 49

Sample Discriminatory Promotion, Transfer, and Layoff Practices 50

What the Supervisor Should Keep in Mind 51

THE EEOC ENFORCEMENT PROCESS 51

Voluntary Mediation 53

Mandatory Arbitration of Discrimination Claims 54

DIVERSITY MANAGEMENT AND AFFIRMATIVE ACTION PROGRAMS 55

Diversity s Potential Pros and Cons 55

* HR AS A PROFIT CENTER 56

Managing Diversity 56

Encouraging Inclusiveness 57

Developing a Multicultural Consciousness 58

Equal Employment Opportunity Versus Affirmative Action 59

Implementing the Affirmative Action Program 59

Reverse Discrimination 60

CHAPTER SECTION SUMMARIES 61

DISCUSSION QUESTIONS 62

INDIVIDUAL AND GROUP ACTIVITIES 62

EXPERIENTIAL EXERCISE: SPACE CADET OR VICTIM? 63

APPLICATION CASE: AN ACCUSATION OF SEXUAL HARASSMENT IN PRO SPORTS 63

CONTINUING CASE: CARTER CLEANING COMPANY 64

KEY TERMS 65

ENDNOTES 65

3 Human Resource Management Strategy and Analysis 70 THE STRATEGIC MANAGEMENT PROCESS 72

* THE STRATEGIC CONTEXT: The Shanghai Portman Hotel 72

Goal-Setting and the Planning Process 72

Strategic Planning 73

Improving Productivity Through HRIS: Using Computerized Business Planning Software 76

Types of Strategies 76

Top Managers Role in Strategic Planning 78

VIII CONTENTS

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Departmental Managers Strategic Planning Roles 78

Departmental Managers Strategic Planning Roles in Action: Improving Mergers and

Acquisitions 79

STRATEGIC HUMAN RESOURCE MANAGEMENT 80

Defining Strategic Human Resource Management 80

Human Resource Strategies and Policies 82

HR AS A PROFIT CENTER: Albertsons Example 82

Strategic Human Resource Management Tools 82

HR METRICS AND BENCHMARKING 84

Types of Metrics 85

Improving Productivity Through HRIS: Tracking Applicant Metrics for Improved Talent

Management 85

Benchmarking in Action 86

Strategy and Strategy-Based Metrics 87

Workforce/Talent Analytics and Data Mining 87

HR AS A PROFIT CENTER: Using Workforce/Talent Analytics 88

What Are HR Audits? 89

Evidence-Based HR and the Scientific Way of Doing Things 90

WHAT ARE HIGH-PERFORMANCE WORK SYSTEMS? 91

High-Performance Human Resource Policies and Practices 92

CHAPTER SECTION SUMMARIES 93

DISCUSSION QUESTIONS 94

INDIVIDUAL AND GROUP ACTIVITIES 94

EXPERIENTIAL EXERCISE: DEVELOPING AN HR STRATEGY FOR STARBUCKS 95

APPLICATION CASE: SIEMENS BUILDS A STRATEGY-ORIENTED HR SYSTEM 95

CONTINUING CASE: CARTER CLEANING COMPANY 96

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 96

KEY TERMS 98

ENDNOTES 99

PART 1 VIDEO CASES APPENDIX 100

PART TWO RECRUITMENT, PLACEMENT, AND TALENT

MANAGEMENT 102

4 Job Analysis and the Talent Management Process 102 THE TALENT MANAGEMENT PROCESS 104

What Is Talent Management? 104

THE BASICS OF JOB ANALYSIS 105

Uses of Job Analysis Information 106

THE STRATEGIC CONTEXT: Daimler Alabama Example 107

Conducting a Job Analysis 107

HR AS A PROFIT CENTER: Boosting Productivity through Work Redesign 108

Job Analysis Guidelines 110

METHODS FOR COLLECTING JOB ANALYSIS INFORMATION 110

The Interview 110

Questionnaires 113

Observation 114

Participant Diary/Logs 114

Quantitative Job Analysis Techniques 114

Internet-Based Job Analysis 116

WRITING JOB DESCRIPTIONS 118

Job Identification 118

Job Summary 119

Relationships 121

Responsibilities and Duties 121

CONTENTS IX

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MANAGING THE NEW WORKFORCE: Writing Job Descriptions That Comply

with the ADA 122

Standards of Performance and Working Conditions 122

Duty: Accurately Posting Accounts Payable 122

Using the Internet for Writing Job Descriptions 122

WRITING JOB SPECIFICATIONS 126

Specifications for Trained Versus Untrained Personnel 126

Specifications Based on Judgment 126

Job Specifications Based on Statistical Analysis 127

Using Task Statements 127

PROFILES IN TALENT MANAGEMENT 128

Competencies and Competency-Based Job Analysis 128

How to Write Job Competencies-Based Job Descriptions 130

CHAPTER SECTION SUMMARIES 131

DISCUSSION QUESTIONS 132

INDIVIDUAL AND GROUP ACTIVITIES 132

EXPERIENTIAL EXERCISE: THE INSTRUCTOR S JOB DESCRIPTION 132

APPLICATION CASE: THE FLOOD 133

CONTINUING CASE: CARTER CLEANING COMPANY 133

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL

PARIS CASE 134

KEY TERMS 134

ENDNOTES 134

5 Personnel Planning and Recruiting 136 INTRODUCTION 138

WORKFORCE PLANNING AND FORECASTING 138

Strategy and Workforce Planning 138

THE STRATEGIC CONTEXT: IBM 139

Forecasting Personnel Needs (Labor Demand) 139

Improving Productivity Through HRIS: Computerized Personnel Forecasting 142

Forecasting the Supply of Inside Candidates 142

Forecasting the Supply of Outside Candidates 144

Talent Management and Predictive Workforce Monitoring 144

Developing an Action Plan to Match Projected Labor Supply and Labor Demand 145

The Recruiting Yield Pyramid 145

THE NEED FOR EFFECTIVE RECRUITING 146

Why Recruiting Is Important 146

What Makes Recruiting a Challenge? 146

Organizing How You Recruit 146

INTERNAL SOURCES OF CANDIDATES 147

Using Internal Sources: Pros and Cons 147

Finding Internal Candidates 147

Rehiring 147

Succession Planning 148

Improving Productivity Through HRIS: Succession and Talent Planning Systems 148

OUTSIDE SOURCES OF CANDIDATES 149

Recruiting via the Internet 149

Advertising 152

Employment Agencies 154

Temp Agencies and Alternative Staffing 155

Offshoring and Outsourcing Jobs 157

Executive Recruiters 157

On-Demand Recruiting Services 158

College Recruiting 158

Referrals and Walk-Ins 159

Telecommuters 160

Military Personnel 160

X CONTENTS

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Recruiting Source Use and Effectiveness 160

Evidence-Based HR: Measuring Recruiting Effectiveness 161

HR AS A PROFIT CENTER: GE Medical Recruitment Process Outsourcing (RPO) example 162

Improving Productivity Through HRIS: An Integrated Approach to Recruiting 162

RECRUITING A MORE DIVERSE WORKFORCE 162

Single Parents 162

Older Workers 163

Recruiting Minorities 163

Welfare-to-Work 164

The Disabled 164

DEVELOPING AND USING APPLICATION FORMS 164

Purpose of Application Forms 164

Application Guidelines 166

Application Forms and EEO Law 166

Using Application Forms to Predict Job Performance 167

Mandatory Arbitration 167

CHAPTER SECTION SUMMARIES 167

DISCUSSION QUESTIONS 168

INDIVIDUAL AND GROUP ACTIVITIES 168

EXPERIENTIAL EXERCISE: THE NURSING SHORTAGE 169

APPLICATION CASE: FINDING PEOPLE WHO ARE PASSIONATE ABOUT WHAT THEY DO 169

CONTINUING CASE: CARTER CLEANING COMPANY 170

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL

PARIS CASE 170

KEY TERMS 171

ENDNOTES 171

6 Employee Testing and Selection 174 WHY CAREFUL SELECTION IS IMPORTANT 176

Person and Job/Organization Fit 176

THE STRATEGIC CONTEXT: Crowd Sourcing at Google 176

BASIC TESTING CONCEPTS 177

Reliability 177

Validity 178

Evidence-Based HR: How to Validate a Test 180

Bias 182

Utility Analysis 182

HR AS A PROFIT CENTER: Reducing Turnover at KeyBank 183

Validity Generalization 183

Test Takers Individual Rights and Test Security 183

How Do Employers Use Tests at Work? 184

Computerized and Online Testing 185

TYPES OF TESTS 186

Tests of Cognitive Abilities 186

Tests of Motor and Physical Abilities 187

Measuring Personality and Interests 187

Achievement Tests 190

WORK SAMPLES AND SIMULATIONS 190

Using Work Sampling for Employee Selection 190

Situational Judgment Tests 191

Management Assessment Centers 191

Situational Testing and Video-Based Situational Testing 192

Computerized Multimedia Candidate Assessment Tools 192

The Miniature Job Training and Evaluation Approach 193

Realistic Job Previews 193

HR in Practice: Testing Techniques for Managers 193

Summary 194

CONTENTS XI

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BACKGROUND INVESTIGATIONS AND OTHER SELECTION METHODS 194

Why Perform Background Investigations and Reference Checks? 194

The Legal Dangers and How to Avoid Them 195

How to Check a Candidate s Background 196

The Social Network: Checking Applicants Social Postings 198

Using Preemployment Information Services 199

The Polygraph and Honesty Testing 199

Graphology 201

Human Lie Detectors 201

Physical Exams 201

Substance Abuse Screening 202

Complying with Immigration Law 203

Improving Productivity Through HRIS: Using Automated Applicant Tracking and Screening

Systems 204

CHAPTER SECTION SUMMARIES 204

DISCUSSION QUESTIONS 205

INDIVIDUAL AND GROUP ACTIVITIES 205

EXPERIENTIAL EXERCISE: A TEST FOR A RESERVATION CLERK 206

APPLICATION CASE: THE INSIDER 206

CONTINUING CASE: HONESTY TESTING AT CARTER CLEANING COMPANY 207

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 207

KEY TERMS 208

ENDNOTES 208

7 Interviewing Candidates 212 BASIC TYPES OF INTERVIEWS 214

THE STRATEGIC CONTEXT: Whirlpool Corp. 214

Structured Versus Unstructured Interviews 214

Interview Content (What Types of Questions to Ask) 215

How Should We Administer the Interview? 218

HR AS A PROFIT CENTER: Great Western Bank 220

Three Ways to Make the Interview Usefulness 221

THE ERRORS THAT UNDERMINE AN INTERVIEW S USEFULNESS 221

First Impressions (Snap Judgments) 222

Not Clarifying What the Job Requires 222

Candidate-Order (Contrast) Error and Pressure to Hire 222

Nonverbal Behavior and Impression Management 223

Effect of Personal Characteristics: Attractiveness, Gender, Race 223

MANAGING THE NEW WORKFORCE: Applicant Disability and the Employment

Interview 224

Interviewer Behavior 224

HOW TO DESIGN AND CONDUCT AN EFFECTIVE INTERVIEW 225

Designing a Structured Situational Interview 225

How to Conduct an Effective Interview 226

Talent Management: Profiles and Employee Interviews 229

CHAPTER SECTION SUMMARIES 229

DISCUSSION QUESTIONS 230

INDIVIDUAL AND GROUP ACTIVITIES 230

EXPERIENTIAL EXERCISE: THE MOST IMPORTANT PERSON YOU LL EVER HIRE 231

APPLICATION CASE: THE OUT-OF-CONTROL INTERVIEW 231

CONTINUING CASE: CARTER CLEANING COMPANY 232

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 232

KEY TERMS 233

ENDNOTES 233

APPENDIX 1 FOR CHAPTER 7 APPLICANT INTERVIEW GUIDE 236

APPENDIX 2 FOR CHAPTER 7 INTERVIEW GUIDE FOR INTERVIEWEES 238

PART 2 VIDEO CASES APPENDIX 240

XII CONTENTS

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PART THREE TRAINING AND DEVELOPMENT 242

8 Training and Developing Employees 242 ORIENTING AND ONBOARDING NEW EMPLOYEES 244

The Purposes of Employee Orientation/Onboarding 244

The Orientation Process 244

OVERVIEW OF THE TRAINING PROCESS 246

Aligning Strategy and Training 246

THE STRATEGIC CONTEXT 246

Training and Performance 247

The ADDIE Five-Step Training Process 247

Conducting the Training Needs Analysis 247

Designing the Training Program 250

Developing the Program 253

IMPLEMENTING TRAINING PROGRAMS 253

On-the-Job Training 253

Apprenticeship Training 255

Informal Learning 255

Job Instruction Training 255

Lectures 256

Programmed Learning 256

Audiovisual-Based Training 257

Vestibule Training 257

Electronic Performance Support Systems (EPSS) 257

Videoconferencing 258

Computer-Based Training (CBT) 258

Simulated Learning 258

Interactive Learning 259

Internet-Based Training 259

Improving Productivity Through HRIS: Learning Management Systems 260

Mobile Learning 260

The Virtual Classroom 261

Lifelong and Literacy Training Techniques 261

Team Training 262

IMPLEMENTING MANAGEMENT DEVELOPMENT PROGRAMS 263

Strategy and Development 263

Managerial On-the-Job Training 263

Off-the-Job Management Training and Development

Techniques 264

Leadership Development at GE 266

Talent Management and Mission-Critical Employees: Differential Development

Assignments 267

MANAGING ORGANIZATIONAL CHANGE PROGRAMS 268

What to Change 268

Lewin s Change Process 269

Leading Organizational Change 269

Using Organizational Development 270

EVALUATING THE TRAINING EFFORT 272

Designing the Study 272

Training Effects to Measure 273

HR AS A PROFIT CENTER: Judging Training s Impact 274

CHAPTER SECTION SUMMARIES 275

DISCUSSION QUESTIONS 275

INDIVIDUAL AND GROUP ACTIVITIES 276

EXPERIENTIAL EXERCISE: FLYING THE FRIENDLIER SKIES 276

APPLICATION CASE: REINVENTING THE WHEEL AT APEX DOOR COMPANY 277

CONTINUING CASE: CARTER CLEANING COMPANY 277

CONTENTS XIII

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TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 278

KEY TERMS 278

ENDNOTES 278

9 Performance Management and Appraisal 282 BASIC CONCEPTS IN PERFORMANCE MANAGEMENT AND APPRAISAL 284

The Performance Appraisal Process 284

Why Appraise Performance? 285

HR AS A PROFIT CENTER: Setting Performance Goals at Ball Corporation 286

The Importance of Continual Feedback 286

Performance Management 286

THE STRATEGIC CONTEXT: TRW 287

Defining the Employee s Goals and Performance Standards 287

Who Should Do the Appraising? 288

TECHNIQUES FOR APPRAISING PERFORMANCE 290

Graphic Rating Scale Method 290

Alternation Ranking Method 294

Paired Comparison Method 294

Forced Distribution Method 294

Critical Incident Method 295

Narrative Forms 296

Behaviorally Anchored Rating Scales 296

Mixed Standard Scales 299

Management by Objectives 300

Computerized and Web-Based Performance Appraisal 300

Electronic Performance Monitoring 301

Appraisal in Practice 301

DEALING WITH APPRAISAL PROBLEMS AND INTERVIEWS 302

Potential Appraisal Problems 303

Guidelines for Effective Appraisals 304

Appraisals and the Law 306

Managing the Appraisal Interview 306

PERFORMANCE MANAGEMENT 309

Performance Management vs. Performance Appraisal 309

Using Information Technology to Support Performance Management 310

TALENT MANAGEMENT PRACTICES AND EMPLOYEE APPRAISAL 311

Appraising and Actively Managing Employees 311

Segmenting and Actively Managing Employees in Practice 311

CHAPTER SECTION SUMMARIES 312

DISCUSSION QUESTIONS 313

INDIVIDUAL AND GROUP ACTIVITIES 313

EXPERIENTIAL EXERCISE: GRADING THE PROFESSOR 314

APPLICATION CASE: APPRAISING THE SECRETARIES AT SWEETWATER U 314

CONTINUING CASE: CARTER CLEANING COMPANY 315

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 316

KEY TERMS 316

ENDNOTES 316

10 Employee Retention, Engagement, and Careers 320 MANAGING EMPLOYEE TURNOVER AND RETENTION 322

Costs of Turnover 322

HR AS A PROFIT CENTER 322

Managing Voluntary Turnover 322

Retention Strategies for Reducing Voluntary Turnover 323

A Comprehensive Approach to Retaining Employees 324

THE STRATEGIC CONTEXT: IBM Aims for Flexibility 324

Managing Involuntary Turnover 325

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Talent Management and Employee Retention 325

Job Withdrawal 325

EMPLOYEE ENGAGEMENT 326

Why Engagement Is Important 326

Actions That Foster Engagement 326

Monitoring Employee Engagement 326

CAREER MANAGEMENT 327

Careers Terminology 327

Careers Today 328

Psychological Contract 328

The Employee s Role in Career Management 328

The Employer s Role in Career Management 330

Career Management Systems 330

Gender Issues in Career Development 332

The Manager s Role 333

IMPROVING COACHING SKILLS 333

Building Your Coaching Skills 333

Building Your Mentoring Skills 334

Improving Productivity Through HRIS: Integrating Talent Management and Career

and Succession Planning 336

MAKING PROMOTION DECISIONS 337

Decision 1: Is Seniority or Competence the Rule? 337

Decision 2: How Should We Measure Competence? 337

Decision 3: Is the Process Formal or Informal? 338

Decision 4: Vertical, Horizontal, or Other? 338

Practical Considerations 338

Sources of Bias in Promotion Decisions 338

Promotions and the Law 339

Managing Transfers 339

Managing Retirements 340

CHAPTER SECTION SUMMARIES 341

DISCUSSION QUESTIONS 341

INDIVIDUAL AND GROUP ACTIVITIES 342

EXPERIENTIAL EXERCISE: WHERE AM I GOING . . . AND WHY? 342

APPLICATION CASE: GOOGLE REACTS 343

CONTINUING CASE: CARTER CLEANING COMPANY 343

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 343

KEY TERMS 344

ENDNOTES 344

PART 3 VIDEO CASES APPENDIX 347

PART FOUR COMPENSATION 350

11 Establishing Strategic Pay Plans 350 BASIC FACTORS IN DETERMINING PAY RATES 352

Aligning Total Rewards with Strategy 352

THE STRATEGIC CONTEXT: Wegmans Foods 352

Equity and Its Impact on Pay Rates 353

Legal Considerations in Compensation 354

MANAGING THE NEW WORKFORCE: The Independent Contractor 355

Union Influences on Compensation Decisions 358

Pay Policies 358

HR AS A PROFIT CENTER: Wegmans Foods 359

JOB EVALUATION METHODS 359

Compensable Factors 360

Preparing for the Job Evaluation 360

CONTENTS XV

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Job Evaluation Methods: Ranking 361

Job Evaluation Methods: Job Classification 362

Job Evaluation Methods: Point Method 363

Computerized Job Evaluations 363

HOW TO CREATE A MARKET-COMPETITIVE PAY PLAN 364

1. Choose Benchmark Jobs 364

2. Select Compensable Factors 364

3. Assign Weights to Compensable Factors 365

4. Convert Percentages to Points for Each Factor 365

5. Define Each Factor s Degrees 366

6. Determine for Each Job Its Factors Degrees and Assign Points 366

7. Review Job Descriptions and Job Specifications 366

8. Evaluate the Jobs 367

9. Draw the Current (Internal) Wage Curve 368

10. Conduct a Market Analysis: Salary Surveys 368

11. Draw the Market (External) Wage Curve 370

12. Compare and Adjust Current and Market Wage Rates for Jobs 370

13. Develop Pay Grades 371

14. Establish Rate Ranges 371

15. Address Remaining Jobs 373

16. Correct Out-of-Line Rates 373

PRICING MANAGERIAL AND PROFESSIONAL JOBS 374

Compensating Executives and Managers 374

What Determines Executive Pay? 374

Compensating Professional Employees 375

CONTEMPORARY TOPICS IN COMPENSATION 376

Competency-Based Pay 376

Broadbanding 378

Actively Managing Compensation Allocations and Talent Management 380

Comparable Worth 380

Board Oversight of Executive Pay 381

Total Rewards and Tomorrow s Pay Programs 381

Improving Productivity Through HRIS: Automating Strategic

Compensation Administration 382

CHAPTER SECTION SUMMARIES 382

DISCUSSION QUESTIONS 383

INDIVIDUAL AND GROUP ACTIVITIES 383

EXPERIENTIAL EXERCISE: RANKING THE COLLEGE S ADMINISTRATORS 384

APPLICATION CASE: SALARY INEQUITIES AT ACME MANUFACTURING 384

CONTINUING CASE: CARTER CLEANING COMPANY 385

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 385

KEY TERMS 386

ENDNOTES 386

12 Pay for Performance and Financial Incentives 390 MONEY AND MOTIVATION 392

Linking Strategy, Performance, and Incentive Pay 392

THE STRATEGIC CONTEXT: The Car Sales Commission 392

Motivation and Incentives 393

Incentive Pay Terminology 395

Employee Incentives and the Law 395

INDIVIDUAL EMPLOYEE INCENTIVE AND RECOGNITION PROGRAMS 396

Piecework Plans 396

Merit Pay as an Incentive 396

Incentives for Professional Employees 398

Nonfinancial and Recognition-Based Awards 398

Online and IT-Supported Awards 400

Job Design 400

XVI CONTENTS

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INCENTIVES FOR SALESPEOPLE 400

Salary Plan 401

Commission Plan 401

Combination Plan 401

Maximizing Sales Force Results 402

Evidence-Based HR: How Effective Are Your Incentives? 402

INCENTIVES FOR MANAGERS AND EXECUTIVES 403

Strategy and the Executive s Long-Term and Total Rewards Package 403

Sarbanes-Oxley 404

Short-Term Incentives and the Annual Bonus 404

Strategic Long-Term Incentives 406

Other Executive Incentives 407

TEAM AND ORGANIZATIONWIDE INCENTIVE PLANS 407

How to Design Team Incentives 407

Evidence-Based HR: How Effective Are Your Incentives? 408

Profit-Sharing Plans 409

Scanlon Plans 409

Other Gainsharing Plans 410

At-Risk Pay Plans 410

Employee Stock Ownership Plans 411

DESIGNING EFFECTIVE INCENTIVE PROGRAMS 411

HR AS A PROFIT CENTER: The Impact of Financial and Nonfinancial Incentives 412

The Five Building Blocks of Effective Incentive Plans 412

Incentive Plans in Practice: Nucor 413

CHAPTER SECTION SUMMARIES 413

DISCUSSION QUESTIONS 414

INDIVIDUAL AND GROUP ACTIVITIES 414

EXPERIENTIAL EXERCISE: MOTIVATING THE SALES FORCE AT EXPRESS AUTO 415

APPLICATION CASE: INSERTING THE TEAM CONCEPT INTO COMPENSATION OR NOT 415

CONTINUING CASE: CARTER CLEANING COMPANY 416

TRANSLATING STRATEGY INTO HR POLICIES & PRACTICES CASE: THE HOTEL PARIS CASE 417

KEY TERMS 417

ENDNOTES 418

13 Benefits and Services 422 THE BENEFITS PICTURE TODAY 424

Policy Issues 424

THE STRATEGIC CONTEXT: NES Rentals 425

PAY FOR TIME NOT WORKED 425

Unemployment Insurance 425

Vacations and Holidays 427

Sick Leave 427

Evidence-Based HR: Tracking Sick Leave 428

HR AS A PROFIT CENTER: Cutting Absences at the Driver and Vehicle Licensing Agency 428

Parental Leave and the Family and Medical Leave Act 429