Compensation and Employment Law Flashcards by Dee Blackmon

What are 2 ways to classify compensation?

Direct & Indirect

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What is direct compensation?

Direct compensation involves monetary payments to employees for time worked or results obtained.

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What is indirect compensation?

Indirect compensation involves expenditures made by an employer on behalf of all employees and is typically referred to as “fringe benefits.”

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Components of direct compensation

Base salary
Premium payments (overtime, shift differentials, longevity pay.)
Contingent programs (incentive plans or achievement award, merit pay)

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Components of indirect compensation

Protection programs -
(Social Security, Worker’s Compensation, Unemployment Compensation, pension plans, health, dental, vision, life, accidental death and long term disability insurance.)

Paid Leave -
(vacations, holidays, jury duty, sick leave, military leave.)

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Which of the following is NOT direct pay?

A. Long term incentive pay
B. Cash given as recognition and achievement awards
C. Differential Pay
D. Deferred pay

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Which of the following is not indirect compensation?

A. Legally required benefits
B. Pay programs for selected employees
C. Income replacement programs
D. Flexible benefit plans

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What are the key components of a compensation and classification system?

Job Analysis
Job Descriptions
Salary Surveys
Job Evaluations
Pay Structures
Policies and Regulations

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What is job analysis?

Job analysis is the process of gathering and analyzing data regarding all aspects of a position, including the following:

Tools, materials, equipment
Methods or processes
Specific duties
Critical tasks
Outcomes of job for which employee will
be held accountable and evaluated
Behaviors, Skills, Knowledge, Experience

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What methods are used in Job Analysis?

Questionnaire - open-ended and highly
structured
Interview
Observation
Work Diary
Behavioral event interview

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What is the first and most important step in conducting job analysis?

Communicate with employees

  What are we doing and why?
  Role of the employees
  Final product

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What is developed using the results of job analysis?

Job description

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What aspects of a position do job descriptions summarize?

Tasks, Responsibilities, Requirements

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What is job evaluation?

The process of determining the worth or value of a job, among and within job categories in an organization

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What 2 things must be done first before job evaluation?

Job analysis and producing an accurate job description

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How does job analysis, job descriptions, and job evaluation relate to FLSA?

These processes determine whether or not a position is exempt from FLSA overtime requirements

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What features make up a good job description?

Job code and title
Purpose of position
Essential duties
Minimum Qualifications
Physical / Mental Qualifications
KSA’s

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What are KSA’s?

Knowledge, Skills, Abilities

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What components of a job description is critical in maintaining compliance with the ADA?

Essential Functions
Physical and mental requirements

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What are the benefits of a good job description?

Promote employee ownership and
interactive management
Document the evolution of job duties
Evaluate employee performance
Promote legal compliance
Maintain a consistent salary structure

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What are duty statements also known as?

Essential functions

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True or false: A duty statement should focus on primary, current, normal, daily duties and responsibilities of a position, as well as incidental duties, employee’s qualifications, or temporary assignments.

False - A duty statement should NOT focus on incidental duties, employee’s qualifications or temporary assignments.

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Well written duty statements contain __________ ___________ which accurately describe what is being done.

Action verbs

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A duty statement should be __________ based to allow for alternate means of performing duty, technology changes, employee and supervisor preferences and accommodations of workers with disabilities.

Outcome

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Duty statements contain 3 parts:

Action verb, Object of the verb, Purpose

The ADA describes a qualified individual with a disability as

A person with a disability who can fulfill, with or without reasonable accommodation, the requisite skill, experience, education, and other job related requirements, and who can perform the **ESSENTIAL FUNCTIONS** of such position.

What are 5 types of physical demand of a job?

Strength Movement Auditory Taste / Smell Vision

What aspects of a job should be described in a good job description?

Mental functions, Relations with Others, Physical demands (strength, movement, auditory, taste / smell, vision), Environmental conditions / Physical surroundings, Equipment used, Hazards

Recent complaints filed with the EEOC under the ADA indicate what essential job responsibilities should be included in a job description.

Hours of work Attendance requirements Internal working relationships Communicate Stress Flexibility Business necessity

What is achieved through classifying and evaluating a job?

Objective evaluation of positions - focus on job content, not personal abilities, classification according to duties and responsibilities Achieving internal equity - determine relative value of all positions, pay employees in accordance with degree of difficulty or complexity of job

What is the first step of job evaluation?

Job audit

What does a job audit involve?

Meeting with incumbents, co-workers, supervisors, department heads, etc. Reviewing the class specification Internal research or study of other class specifications for compensation Overall analysis to form a classification recommendation

What are 2 types of systems for classifying and evaluating a job?

Non-quantitative & Quantitative

What are 4 types of Non-quantitative systems?

Market pricing, whole job ranking, classification, slotting

What are 3 types of quantitative systems?

Point Factor, Point-factor comparison, Matrix Point-factor

What is the classification method?

Consists of grouping jobs into a predetermined number of grades, each having a class specification to use for job comparisons.

Ranking method

Establishing a hierarchy of jobs from lowest to highest based on overall importance to organization

Which method would be most appropriate for a large organization or public sector government agency - classification or ranking method?

* Classification - large, public sector * Ranking - more appropriate for a small organization lacking in resources

What job evaluation method uses compensable factors to evaluate job worth?

Point method

What job evaluation method uses ranking of jobs on selected compensable factors and then identifies factor weights to develop a score?

Factor Comparison Method

Which job evaluation method is best for producing objective, defensible results and provides good documentation and an audit trail? A. Classification B. C & D C. Point method D. Factor Comparison

B. Both point method and factor Comparison method

Which job evaluation method is not a true job evaluation system?

Market based

Market based method is most suitable for organizations where it is vital to maintain ____________ _______________ position.

Competitive market

What is a disadvantage of market based method as compared to job content approaches?

Less legally defensible

What factors are used to classify and evaluate a job?

Compensable factors Individual comparison points vs. set point values

Good job evaluation focuses on what 3 things:

Job duties, tasks, and responsibilities

True or False: Personal attributes of an employee are considered in job evaluation.

False

What is a salary survey?

A salary survey is a standard method of finding out what other organizations pay for specific positions or job categories.

Quantifiable data collected by a salary survey

Base salary Salary increases Salary ranges Starting salary Incentives/Bonuses Assignments Work hours

Non quantifiable data that may be collected by a salary survey

Educational requirements Geographic location Hiring Sources Working conditions

Characteristics of a salary survey

1. Include list of participating companies that are reviewed 2. Ensure that competitors in the labor market are sufficiently represented. 3. Include job descriptions 4. Include total compensation information that includes retirement plans, bonuses, incentives, and base pay

What 2 things are established/calculated by developing a pay structure?

Pay grades Pay ranges

What are job grades?

Used to group jobs that have approximately the same relative internal worth

True or false: All jobs within a particular grade are paid the same rate or within the same rate range.

True

Factors that determine the number of job grades in a pay structure.

Size of organization Vertical distance between highest and lowest level job How finely the organization defines jobs and differentiates between them Pay increase and promotion policy of organization Slope of pay policy line Administrative efficiency concerns

Pay Structure Basics

Pay Ranges - set upper & lower bounds of possible compensation for individuals for whose jobs fall in the grade Pay ranges are created for each job grade. Market data from surveys is used to establish the maximum, minimum, and midpoint of the pay range The pay grade will vary depending on the organization's promotion policy, pay increase policy, and other administrative concerns.

Pay range spread formula

(Maximum - Minimum) / Minimum

Typical range spreads

Non-exempt - 40% Exempt - 50% Executive - 60%

Can there be an overlap between pay ranges?

Yes

Overlap between pay ranges makes it possible for an ___________worker in a job in a ___________ grade to be paid **MORE** than an ______________ worker in a _____________ grade.

Experienced, lower, inexperienced, higher

Who is responsible for maintaining a pay structure?

Human Resources Committee Outsource

What are 3 types of reward systems?

Longevity-based Performance-based Skilled-based

Which reward system is popular in the public sector?

Longevity-based

Longevity-based reward system

Allows "hands off" management Can be used in conjunction with other reward systems

Why is a longevity-based system ineffective as a reward system?

Does not reward performing employees Does not discourage undesired behaviors

Performance-based reward system

Pay / bonuses directly linked to employee's performance Rewards performing employees Can extinguish undesirable behavior Mechanism for establishing & communicating specific performance goals

In a performance-based reward system, increases are based on __________ of salary range, not on current salary.

Midpoint

In a skilled-based system, pay/bonuses are linked to employee's ________________.

Abilities

Skilled-based system encourages professional _______________.

Advancement

In a skills based system, employees are rewarded as they ____________ established skill areas.

Master

In a skills based system, desired skills areas must be ___________________.

Pre-established

What 2 things are true of desired skills areas that are pre-established in a skills based system

Must directly support purpose of position or organization May not be applicable to all positions/units

Compensation and Employment Law Flashcards

(72 cards)