PU Differences Between the Compensation System & the Average Store Employee Questions

  

write minimum 250 words for each of the 3 question below

please refer to the power points and article I attached

Using the attached CVS article answer the two following questions: (5-8 sentences)

-Do you think the compensation system was different between the average store employee and corporate? Why?

-If you were CVS’s CEO, knowing that you have to reduce costs and balance employee wages, what other measures would you take besides freezing raises for the highest-paid employees?

Answer the three questions using given powerpoints and HR terms: (7-9 sentences)

You manage a small bookstore and notice that your employees are faced with numerous job stressors. Discuss two specific organizational strategies (besides “set up an EAP” or “set up a wellness program”) you might implement to reduce their distress, and why each strategy would be effective.[***This one will require you to be creative. You can reference our workplace safety lecture for the stress aspects, but you should consider using outside sources or personal experiences.]

A friend of yours who owns a small business says to you, “My employees don’t seem to be very motivated – I’m thinking of giving out pay raises. Do you think this will be effective?” Pick any two of the following theories (need theories, reinforcement theory, expectancy theory, equity theory), and for each theory describe one specific thing she should do in order to increase the effectiveness of pay raises as a motivator, and why she should do it (relate your suggestion to a specific aspect of the theory).

You’re in the process of developing a training program designed to teach middle-level managers how to use an iPad. Choose 1 of the 4 theories of motivation we have learned in this class to describe and illustrate your training program. (In benefits powerpoint: expectancy theory, equity theory, reinforcement theory, Herzberg’s Hygiene

–

Motivator Theory)

.doc file | MLA | Case Study | 2 pages, Single spaced

Benefits
MARIAH NORELL | MSIO | SJSU | FALL ‘20
1
Maslow’s Hierarchy of Needs
2
Herzberg’s
Hygiene–
Motivator Theory
The best way to motivate
someone is to organize the
job so that doing it provides
feedback and challenge
that helps satisfy the
person’s higher-level needs
3
Motivation
In order to motivate employees, 4 things are at play:
â—¦ 1. Expectancy Theory
â—¦ Value / attractiveness
â—¦ 2. Equity Theory
â—¦ Performance outcome expectancy
â—¦ 3. Reinforcement Theory (Operant Conditioning from Training and Development lecture)
â—¦
Effort-performance expectancy
◦ 4. Herzberg’s Hygiene-Motivator Theory
â—¦ Motivate through feedback and challenges
4
Benefits
v We talked about incentives briefly in
the compensation lecture
v We learned that “incentive pay” has
two other terms:
v Pay for Performance
v Variable Pay
5
6
Why Give Incentives?
1. To reward employees for past
performance in hope they will repeat
desired behaviors and want similar
rewards in future
2. To move risk associated with paying
employees from firm to individual
3. To guide employees toward goals
7
Embrace challenges
• Go outside of your comfort zone
Experience accountability
Accountability
• Your outcomes are a product of you’re your
actions
Consistent feedback
• Rigorous, consistent feedback is crucial
Self-reflection
• Introspection about progress is key
8
The Value of Incentives
v Compensation that depends on some
measure of individual or group performance or
results in order to be awarded
v Two basic choices:
v Individual
v Group-Based
9
Individual Incentives
Individual or
Group-Based
Incentives?
• Reinforce performance with
rewards that are significant to a
person
Group Incentives
• Provide reinforcement for
actions of more than one
individual within organization
10
Incentive Programs
v Individual Employee Incentive
v Recognition Programs
v Sales Compensation Programs
v Team/Group-based & Variable Pay Programs
v Organization-wide Incentive Programs
v Executive Incentive Compensation Programs
11
Individual Incentive Plan Advantages and Disadvantages
Group Incentive Plan Advantages and Disadvantages
12
Bonus – A lump sum payment given to employees at end of a
period; most effective after employees reach a specific goal
Individual
Incentive
Options
Commission – Payment for selling an item, usually calculated
as a percentage of item’s price; most effective when it
provides a return
Merit Pay – Rewards top performers with increases in annual
wage that carry over years; most effective when employees
understand benefits of incentive and when top performers are
rewarded
13
Merit Pay Grid
14
Individual
Incentive
Options
Piecework Plans – The more employees get done, the more
they are paid; most effective when managers set performance
standards and offer feedback
Standard Hour Plans – Each task is assigned a “standard”
amount of work time for completion; most effective if
employees must redo substandard work for no additional pay
15
Group
Incentive
Options
Profit Sharing Plans – Portion of company proceeds paid over
time through bonus payment; most effective when
management doesn’t minimize profits
Gainsharing Plans – Accomplished through factors that cost
company money; more effective than profit sharing
16
Group
Incentive
Options
Employee Stock Ownership Plan (ESOP) – Company stock
given to employees over time; offers tax advantages to firm
and employees; motivates employees to feel/act more like
owners of firm
Stock Options– Employees may buy X shares of company
stock in future at a preset price; motivates employees to
improve value of firm
Stock Purchasing Plans – Ability to purchase company stock
anytime, usually at discount
17
Implementing an Effective Incentive Plan
Ask: Does it
make sense to
use an incentive
here?
Link the
incentive with
your strategy
Make sure the
program is
motivational
Set complete
standards
Be scientific in
analyzing the
effects of the
plan
18
Performance pay can’t replace good management
You get what you pay for
Why
Incentive
Plans Fail
“Pay is not a motivator”
Rewards punish
Rewards rupture relationships
Rewards can have unintended consequences
Rewards may undermine responsiveness
Rewards undermine intrinsic motivation
19
Executive Compensation
20
Executive Compensation:
Too Much or Just Enough?
Excesses in Executive Pay
◦ Questions about ethics and social responsibility arise when, for example, the CEO’s pay increases
while employees take pay cuts and are laid off
â—¦ It harms stakeholders (including employees and shareholders) to reward relatively few executives
â—¦ It affects market value of firms and results in Dodd-Frank Wall Street Reform and Consumer
Protection Act
â—¦ *During Covid-19 many executives took 20%, 50%, or even 100% salary cuts to protect
employee’s jobs
21
Executive Incentives
vShould be designed to motivate executives to
make decisions that benefit the organization in
the short term and the long term
v Perquisites
v Short-term bonuses
v Long-term stock awards or options
22
Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010
vLimits executive pay in public corporations and adds requirements for reporting compensation
vIntent is to create a sound economic foundation to grow jobs, protect consumers, etc.
vSignificant Provisions
vShareholders can vote on executives’ comp packages (“say on pay”)
vPublic companies must disclose CEO’s total comp and total median comp of employees
vPublic firms must provide annual information on executive comp and total shareholder return
23
24
Employee
Benefits
25
Statutory Benefits
26
Statutory (Legally Required) Benefits
1. Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA)
6. Medicare: National healthcare program for
elderly or disabled (65+ years old)
2. Disability and Survivor Benefits
7. Patient Protection and Affordable Care Act of
2010 (PPACA)
3. Employee Retirement Income Security Act of
1974 (ERISA)
4. Family and Medical Leave Act of 1993 (FMLA)
5. Health Insurance Portability and Accountability
Act of 1996 (HIPAA)
8. Retirement (ERISA)
9. Social Security: Old age, survivors, and
disability insurance (OASDI) programs
10. Workers’ Compensation
27
Consolidated
Omnibus
Budget
Reconciliation
Act of 1985
(COBRA)
vTemporary health insurance to individuals
who leave employment for 18-36 months
vCost of insurance is full rate
vInsurance protection remains without
interruption
28
Major Provisions of ERISA:
Employee
Retirement
Income
Security Act of
1974 (ERISA)
Eligibility
Vesting
Portability
Fiduciaries
PBGC
29
Cliff Vesting
Graded
Vesting
Gives participants full right to the employer’s matching contribution
after three years of service.
Gives participants an increasing right to the employer’s matching
contribution over a six-year schedule of 20% after two years of
service and 20% for each succeeding year thereafter.
Employees’ Vesting Rights: ERISA
30
Health
Insurance
Portability and
Accountability
Act of 1996
(HIPAA)
vIf an employee had group health insurance
at a previous job &
v if new employer has health care coverage,
v then the firm is required to provide the
opportunity to participate in their health
insurance plan
vHelpful for those undergoing treatment for
preexisting conditions
31
Social Security
(Federal Old
Age and
Survivor’s
Insurance)
v A federal payroll tax (7.65%) paid by both
the employee and the employer on the
employee’s wages
v Retirement benefits at the age of 62
v Survivor’s or death benefits paid
to the employee’s dependents
v Disability payments to disabled employees
and their dependents
32
Unemployment: Covid-19
v Families First Coronavirus Response Act (FFCRA) – March 18,
2020
v Coronavirus Aid, Relief, and Economic Security Act (CARES)
– March 27, 2020
v FAQ’s found here
33
Ineligible for
Unemployment Insurance:
v Fails to look for work
v Was terminated “for cause”
v As a member of a union, participates in a
strike against the company (in most states)
v Quit voluntarily
v Refuses suitable work
v Becomes self-employed
v Fails to disclose any monies earned in a
period of unemployment
34
vProvides medical treatment and temporary
payments to employees who are injured on
job or become ill because of job
Workers’
Compensation
vPaid for by employers
vRates are primarily determined by three
factors:
vOccupations
vExperience ratings
vLevel of benefits payable
35
Voluntary Benefits
36
Voluntary Benefits
1. Paid Time Off or PTO – Average cost is approximately $1 for every $10 in direct wages
2. Vacation or Annual Leave – Average vacation time in 2007 was 15 days
3. Sick Leave – Approximately three of four employers provide sick leave to employees
4. Holiday Pay – Most companies observe 10 federally mandated holidays along with some “floating” holidays
5. Paid Personal Leave – Two of five companies provide paid personal leave in addition to vacation and sick leave
37
v Healthy Workplaces, Healthy Families Act of 2014
(AB 1522), CA to enact a mandate that employers
provide paid sick leave to their employees
CA New Sick
Leave Law
(2015)
v Labor Code provisions:
v Requires employers to provide at least three days
of paid sick leave annually for their employees
v Require that employees will be entitled to use
accrued paid sick days beginning on the 90th day
of employment
38
Group Health
Insurance
Traditional Health Care Plans – Typically cover a
set percent of fees for medical services
Health Maintenance Organization (HMO) –
Managed care that provides health maintenance
services and medical care
39
Group Health
Insurance
Preferred Provider Organization (PPO) – Hybrid
between traditional fee-for-service plans and
HMOs
Health or Medical Savings Accounts (HSA/MSA)
– Allow employers and employees to fund
medical savings accounts, with which employees
can pay medical expenses with pretax dollars
40
vNot mandatory, but if provided, firm must
comply with ERISA provisions
Retirement
Benefits:
Defined Benefit
Plan
v Available to 74% of full-time workers and
39% of part-time workers in private industry
v Provides retiree with a specific amount
and type of benefit that will be available
when employee retires
41
Retirement
Benefits:
Defined
Contribution
Plan
vDefined contribution plan identifies only
amount of funds that go into a retirement
account, not what employee will receive
upon retirement
42
v401k Retirement Plan – Savings investment
account for individual employees of
corporations
401k and 403b
Plans
v403b Retirement Plan – Similar to 401k,
but used for nonprofits
vMatching Contributions – Many employers
that offer a 401k or 403b provide matching
contributions up to a set maximum
43
IRAs and Roth IRAs – Taxpayers can make
tax-free contributions to an IRA (subject to
maximum annual income limit)
Retirement
Benefits
Simplified Employee Pension (SEP) Plans –
For self-employed individuals and members
of small companies
44
vLife Insurance
Employee
Insurance
Coverage
vDisability Insurance – Short-term and/or
long-term protection
vLife and Health Insurance
vEmployer-Sponsored Insurance –
Automobile, identity theft,
vHomeowners and renters, and pet
45
Administration of
Benefits
Flexible Benefit (Cafeteria) Plans – Multiple options
Modular Plans – Benefits from defined modules; these plans are
easiest for HR to manage
Core Plus Plans – Core benefits available to all; employees
choose from remaining
Full Choice Plans – Employees have complete flexibility
46
Policy Issues in Designing
Benefit Packages
vWhich benefits to offer
vWhether to include retirees
vHow to finance benefits
vCost containment procedures
vWho will be covered
vCoverage during probation
vDegree of employee choice
vCommunicating benefits options
47
Looking Ahead: 2021 Benefits Plans
v 42% of employees say they would sacrifice additional pay each month for a more expansive
health benefit plan, a sharp increase from 27% in 2013
v According to SHRM, these are the top changes companies will implement in 2021:
vExpanding virtual or telehealth programs (32%)
vEnhancing mental health support, such as employee assistance programs or additional services (25%)
vIncreasing cost-sharing for plan expenses such as deductibles, premiums or co-payments (20%)
vAdding or expanding voluntary benefits (16.5%)
vAugmenting services for managing high-cost claims, including specialty pharmacy claims (13.5%)
https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/planning-2021-benefits-changes-for-the-covid-19-era.aspx
48
1. Case Study #3 now posted – read article
(“Bandag Auto”)
Due 12/4 by midnight
Action Items
2. Read “CVS Red-Lined” article
3. Quiz #3 will cover Compensation, Benefits,
and article: CVS Red-Lined Employees
Due 12/4 by midnight
49
Compensation – Part 2
MARIAH NORELL | MSIO | SJSU | FALL ‘20
Does the Employer Have to Pay you for…
1. time spent waiting to punch a time clock?
2. walking from an employer’s parking lot to the workplace?
3. driving between work locations during the day?
4. changing into a uniform on the employer’s premises?
5. time spent emptying pockets and passing through metal detectors before leaving the warehouse?
6. time spent by a cashier in accounting for the money in her register at the end of the day?
2
Recognize this?
v These posters must be put up in workplaces,
typically areas that are most frequented (break
rooms)
v What do we do during this WFH era?
v How do you think this gets enforced?
Fair Labor
Standards Act
(FLSA) of 1938
(Amended)
vCovers minimum wage, overtime issues,
hours worked, record keeping, and child
labor rules for most U.S.-based businesses
vEmployees with specific duties are exempt
from minimum wage, overtime, and child
labor rules
vMinimum wage is the lowest hourly rate of
pay generally permissible by federal law
https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/labor-department-issues-final-federal-overtime-rule.aspx
4
!
D
The US Department of Labor (DOL) announced an
update to the Fair Labor and Standards Act (FLSA) is
expected around March 2019.
S
A
P
FLSA AMENDED!
In the News
(www.flsa.com/coverage)
E
S
Today (2018) overtime remains at $23,600. This is after
the Obama administration unsuccessfully attempted to
raise it to $47,476.
President Trump’s DOL is expected to propose a
threshold somewhere between $32,000 and $35,000 (in
2019).
What this means: If successful, the regulation will specify
the new salary threshold below which employees must
be paid overtime.
*To be exempt (currently), the employee must be paid at
least $23,600 per year ($455 per week), and be paid on
a salary basis, and perform exempt job duties. If paid
less than $23,600, you are nonexempt.
5
*Typically, exempt means you:
1. Make > $648/week ($35,568/year)
2. Must perform certain duties
(exemptions listed here à)
*for over 40 hours worked in a week
Some Typical
Exempt &
Non-Exempt
Job Titles
EXEMPT
NON-EXEMPT
Attorneys
Paralegals
Physicians
Accounting Clerks
Pharmacists
Assistant
Engineers
Newspaper Writers
Teachers
Working Supervisor
Scientists
Management Trainees
Computer Analysts
Secretaries
General Managers
Clerical Employees
Personnel Directors
Retail Workers
Accountants
Representatives
Purchasing Agents
Interns
7
2019 Minimum Wages – Statewide and California Specific
vExecutive Exemption
Duties Tests for
General
Employee
Exemptions
vProfessional Exemption (Learned or Creative)
vAdministrative Exemption
vOutside Sales Exemption
vComputer Employee Exemption
vHighly Compensated Employee Exemption
9
FLSA and Child Labor
v14- and 15-Year-Olds: may work outside school hours no more than “3 hours on a school
day, 18 hours in a school week, 8 hours on a non-school day, and 40 hours in a non-school
week”; permissible work hours also restricted
v16- and 17-Year-Olds: cannot be employed in hazardous jobs, but their work hours are
unrestricted
vIndividuals 18 or Older: can be hired for all work
10
Employee Misclassification
Under the FLSA
vMisclassification of employees as exempt from
minimum wage or overtime is one of the most
common areas where companies get into serious
trouble
vJust paying an employee a “salary” and then working
that person for unlimited hours is obviously illegal
under the general exemption FLSA rules noted above
11
vFederally mandated, higher-than-minimum
wage, required for nonexempt employees if
they work more than 40 hours/week
Overtime
vIn California, more than 8 hours/day
vCurrently set by FLSA as “time and a half,”
or 150% of employee’s normal wages
12
Other Legal Issues
Mandatory employee pension and benefits legislation also includes the following:
â—¦ Social Security
◦ Workers’ compensation
â—¦ Unemployment insurance
â—¦ Family and Medical Leave Act (FMLA)
â—¦ Patient Protection and Affordable Care Act (ACA)
â—¦ Employee Retirement Income Security Act (ERISA)
â—¦ Health Insurance Portability and Accountability Act (HIPPA)
13
Job Analysis
How do you
determine a job
structure?
Job Description
Job Evaluation
Job Structure
14
Job Ranking – Subjectively ordering jobs from
lowest to highest or vice versa in terms of value
to company
Job Evaluation
Determining worth of each position
relative to other positions
Point-Factor – Objectively breaking down job into
“compensable factors” and applying points to
factors based on job’s level of difficulty
Factor Comparison – Analyzing and ranking
“compensable factors” of benchmark jobs in pay
surveys and ranking firm’s jobs against
benchmark
15
Creation of a
Pay Structure
and Individual
Pay Rates
16
Pay structure creates a hierarchy of jobs and
their rates of pay within the organization;
made up of job structures and pay levels
Job Structure
and Pay Levels
Job structure is stacking up jobs in
organization from lowest to highest levels
Pay levels provide minimum to maximum pay
for a group or subset of jobs in organization
17
vA single pay level, or “pay grade,” applies
to many different jobs
Creation of Pay
Levels
vEach pay level has a maximum and
minimum pay rate
vPay rates are determined by comparisons
with Labor Market Competition (minimum
pay level), Product Market Competition (top
pay level), supply and demand, and insure
equity
18
Supply and
Demand Curve
19
Product Market Competition Limits
20
Pay Structure
21
Delayering: Changing company structure to
Delayering and
Broadbanding
rid vertical hierarchy (reporting levels);
process of “flattening” hierarchical levels
found in command-and-control
organizational structures
Broadbanding: Combining multiple pay
levels into one
22
Broadbanding
of Multiple
Pay Levels
23
vMarket is a range, not just one number
Why bother
with salary
grades and
ranges?!
vMarket can fluctuate and you don’t want value to drop
vRanges provide flexibility
vUse different ones for different external markets
vDifferences in pay for individuals based on experience
vDifferences in pay for individual productivity or value
vCan support different designs for mix of pay forms
24
This will be on the quiz!
CVS RedLining
Get into groups and discuss how the red-line
policy will affect the motivation of the
employees involved (think back to terms like
equity and expectancy theories).
25
Watch this Video: Daniel Pink “Drive”
AUTONOMY

MASTERY
PURPOSE
26
Let’s Talk About
LinkedIn
O P E N Q & A S E S S I O N – W H AT
D O YO U WA N T TO K N O W ! ?
27
1. Read “CVS Red-Lined” article
Action Items
2. Individual Project due 11/13 by midnight
3. Quiz #3 will cover Compensation, Benefits,
and article: CVS Red-Lined Employees
Due 12/4 by midnight

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