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174 Cards in this Set
- Front
- Back
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What is a career? |
- a pattern of work related experiences that span the course of a person's life - Reflects any work, paid or unpaid - Is a broad definition helpful in todays work environment where employees and organizations have diverse needs |
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Organizational Career Planning |
- develops career ladders, track careers and provides opportunities for development - Individual career development - Helps employees identify their goals and the steps to achieve them |
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What is the difference between career development and employee development? |
the timeframe |
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What is career development? |
looks at the long-term career effectiveness and success of employees |
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What is employee training and development? |
focuses on performance in the immediate or intermediate time frames |
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Career development adds value to the company by: |
1) ensuring needed talent will be available 2) improving the organizations ability to attract and retain talented employees 3) Ensuring that minorities and women get opportunities for growth and development 4) Reduces employee frustration 5) Enhances cultural diversity 6) Promotes organizational goodwill |
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Individual's external career success is measured by criteria such as: |
- progression up the hierarchy - Type of occupation - Long term commitment - Income |
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Internal career success is measured by: |
the meaningfulness of one's work and achievement of personal life goals |
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Who are mentors? |
Typically senior-level employees who provide a support system for junior employees by offering insight |
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What do mentors offer insight to? |
- how the organization operates, helping expand the junior employee's professional network - Assisting in setting career development goals - Providing feedback when necessary |
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Disadvantages of coaching/mentoring: |
- a tendency to perpetuate current styles and practices - reliance on the coach's ability to be a good teacher |
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Considerations for organizations for coaching/mentoring? |
- coaching between employees who don't have a reporting relationship - ways to effectively implement cross gender mentoring |
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Exploration |
- transition from school to work - includes school and early work experiences such as internships |
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establishment |
getting first job and being accepted |
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Late career |
the elder states person |
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decline |
preparing for retirement |
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What does exploration involve: |
- trying out different fields - discovering likes and dislikes - forming attitudes toward work and social relationship patterns |
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Traditional career stages: |
1) exploration 2) establishment 3) mid-career 4) late career 5) decline |
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What stage is the least relevant to HRM and why? |
exploration because it occurs prior to employment |
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Establishment stage includes: |
- searching for work - getting first job - getting evidence of "success" or "failure" - takes time and energy to find a "niche" and to "make your mark" - sense of growth - increase responsibilities - a lot of uncertainties |
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When does establishment stage end? |
whenyou “arrive” you make your mark, findyour niche—feel settled and stable |
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What happens in mid career? |
Employee may: - continue to grow: seeking increased responsibly - plateau: satisfied with their role in the organization - Deteriorate: loss of interest and reduced productivity people either maintain or deteriorate employees are easier to manage |
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What happens in late career? |
- successful workers with seniority can enjoy being respected for their judgement. Good resource for teaching others - those who have declined may experience job insecurity - plateauing is expected - life off the job increases in importance |
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Decline: |
- may be the most difficult for those who were most successful at earlier stages - todays longer life spans and legal protections for older workers open the possibility for continued work contributions |
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3 major components of Holland Vocational Preferences? |
1) people have varying occupational preferences 2) if you think your work is important, you will be a more productive employee 3) you will have more in common with people who have similar interests |
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6 model vocational themes of the Holland Vocational preferences? |
1) Realistic 2) Investigative 3) Artistic 4) Social 5) Enterprising 6) Conventional |
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Schein Anchors: |
Personal value clusters determine what is important to individuals - technical functional competence - managerial competence - security stability - creativity - autonomy independence success of person job match determines individuals fit with the job |
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What are the 4 personality dimensions of Myers Briggs Typologies? |
1) extraversion-inroversion 2) Thinking-feeling 3) sensing-intuitive 4) judging-perceiving it identifies 16 personality types |
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Myers Briggs Typologies: |
- managers find knowing personality types useful in understanding how workers interact - job characteristics can be matched to individual preferences |
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Successful Career tips: |
1) network contacts 2) keep current 3) keep your options open 4) document your achievements 5) balance your specialist and generalist competencies 6) build and maintain 7) know yourself 8) manage your reputation |
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Direct financial compensation: |
- wages - salaries - commissions - bonuses |
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indirect financial compensation (benefits): |
legally required benefits - social security - unemployment compensation - workers compensation Discretionary benefits - payment for time not worked - health care - life insurance - retirement plans - disability protection - employee stock option plans - employee services - premium pay voluntary benefits |
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non financial on job compensation: |
- meaningful - appreciated - satisfying - learning - enjoyable - challenging |
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non financial job environment compensation: |
- sound policies - capable managers - competent employees - congenial co workers - appropriate status - symbols - working conditions workplace flexibility - flex time - compressed work week - job sharing - telecommuting - part time work |
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Primary determinants of direct financial compensation: |
1) employee 2) organization (job) 3) labor market 4) job (pricing) |
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Direct financial compensation for employee: |
- job performance - skills - competencies - seniority - experience - organization membership - potential - political influence - luck - salary compression |
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Direct financial compensation for job >> pricing: |
job analysis job descriptions job evaluation |
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Direct financial compensation labor market: |
- compensation surveys - expediency - cost of living - labor unions - economy - legislation |
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Direct financial compensation organization >> job: |
- compensation policies - organizational level - ability to pay |
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What is performance management ? |
- Close relationship between incentives andperformance - It is dynamic, ongoing and continuous - Goal oriented process insuring processesare in place to maximize productivity - Each part of the system is integrated andlinked for continuous organizational effectiveness |
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3 main purposes of performance management systems: |
1) two way feedback 2) development 3) documentation |
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two way feedback |
performance measures mutually set between employee and employer |
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development |
identify areas in which employees have decencies or weaknesses |
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documentation |
to meet legal requirements and eliminate problems |
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improving performance management systems: |
- focus on the individual - focus on the process - train appraisers |
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focus on the individual |
discussions of performance may be emotional and may generate conflicts when subordinates and supervisors don't agree |
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focus on the process |
company policies and procedures may present barriers to a properly functioning appraisal process |
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train appraisers |
training reduces appraiser uncertainty, bias and errors in the process |
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How do EEO laws affect performance management? |
- require performance management systems to be objective and job related - must measure "reasonable" success (ADA) - valid performance appraisals are conducted at established intervals - evaluations done by trained appraisers - poorly trained supervisors may show bias |
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Appraisal process: |
1) establish performance standards with employees 2) communicate expectations and set goals 3) measure actual performance 4) compare actual performance with standards 5) discuss the appraisal with the employee 6) is necessary, intimate corrective action |
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establishing performance criteria: |
Traits:attitude, appearance, etc. are difficultto define therefore difficult to measure; sometimes they may be unrelated tojob performance & should be taken out Behaviors:leadership style, customer serviceorientation, teamwork orientation Competence: broad range of knowledge, skills andtraits; technical in nature, job specific OR can be related to interpersonalskills; should be job related Goalachievement: usedwhen a company cares more about ends than means (how you get there); endsshould be in the control of the individual or teams you are evaluatingotherwise it’s unfair Improvementpotential: past can’t be changed so some ofthe criteria must emphasize the future |
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Establish performance standards: |
- derived from the company's strategic goals - based on job analysis and job description |
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communicate expectations: |
goals must be articulated from supervisor to employee and from employee to supervisor |
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measure actual performance using: |
- personal observation - statistical reports - oral reports - written reports |
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compare performance with standards: |
explain different levels of performance and how acceptable they are compared to the standard |
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Discuss appraisal with the employee: |
- feedback has strong impact on employee self esteem and future performance - feed back can be positive or negative |
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initiative corrective action if necessary: |
- immediate action deals with symptoms of the problem - basic corrective action deals with the sources of the problem |
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5 common mistakes managers can make in giving a performance review: |
1) waiting for the performance appraisal to give feedback 2) overemphasizing recent performances 3) being too positive or negative 4) being critical without being constructive 5) talking not listening |
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3 appraisal approaches: |
1) absolute standards 2) relative standards 3) achieved outcomes |
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absolute standards |
- employees performance is measured against established standards - evaluation is independent of any other employee |
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5 absolute standards methods: |
1) critical incident appraisal 2) checklist appraisal 3) graphic rating scale appraisal 4) forced choice appraisal 5) behaviorally anchored rating scales |
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critical incident appraisal |
- based on key behavior anecdotes illustrating effective or ineffective job performance - Written records of highly favorable andunfavorable work actions - the appraisal is more likely to cover an entireevaluation period - site specific behaviors the strength of critical incidentappraisal it focuses on behaviors - the weakness is that its not easy toquantify. |
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checklist appraisal |
appraiser checks off behaviors that apply to the employee - Alist of behavioral descriptions - Raterdoes not evaluate performance, only recording it -Limitation:can be bias because the rater can pick up positive/negative connections withitems, can be time consuming, inefficient |
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graphic rating scale appraiser |
appraiser rates employee on a number of job related factors; avoids abstract categories - Mostsuccessful if you can eliminate abstract traits like loyalty, integrity -Ona scale (slide 15) -Itemsneed be clearly understood, could present a challenge if the rater has anyuncertainty about an item they could choose the wrong answer and it could notbe what they meant -Strength:Less time consuming -Weakness:not as in-depth -Quantitativeanalysis |
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forced choice appraisal |
appraisers ponder sets of statements that appear to be equally favorable, then choose the statements that best describes the employee -Assumesall groups of employees have the same distribution, if they aren’t actually thesame can lead to limitations -Facilitatesbudgeting -Guardagainst weak managers who are too timid to get rid of poor performers -Advantage:you don’t know what the correct answer is, all are positive statements or allnegative so the raters don’t know what HR is looking for -Disadvantage:some people don’t like to choose, they don’t want to choose only one answer |
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behaviorally anchored rating scales (bars) |
appraiser rates employee on factors that are defined by behavioral descriptions illustrating various dimensions along each rating scale -Combiningmajor elements from critical incidents and graphic rating scale appraisal(combines 1 + 3) -Basedon actual behaviors on the job not general descriptions -Processof developing BARS is clear to employee and rater -Advantage:Which behavior represents good performance is clear |
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Rating scales |
- rating employees according to defined factors - judgements are recorded on a scale - many employees are evaluated quickly, not time consuming, easy and simple to use - typically has 4-7 categories - adjectives used: outstanding, meets expectations, needs improvements |
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Ranking |
- all employees are ranked in order of overall performance - comparison is based on a single criteria - this comparative approach is useful when management must make HR decisions such as promotion or pay increases |
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Group Order ranking |
- employees are placed in a classification reflecting their relative performance (ex: top one fifth) - forced to put employees rating into a fixed class of ranking - compare individuals against other individuals in the group - advantage: prevent raters from evaluating highly - disadvantage: small group of employees, what if all really are good performers. One still has to be at the bottom so makes it inaccurate; when you have a group of mediocre or poor performers someone still has to be at the top so it again makes it inaccurate |
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Individual Ranking |
- employees are ranked from highest to lowest - means only one person can be the best - limitation: what if you have more than one GREAT performer in your group - more appropriate when you have a smaller group |
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Paired comparison |
each individual is compared to every other final ranking based on number of times the individual is preferred member in a pair |
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Management by Objectives (MBO) |
- includes mutual objective setting and evaluation based on the attainment of the specific objectives - the organizational objectives translate into specific objectives for the divisional/departmental/individual levels - key is participation, invite employees to set goals jointly with supervisors - positive effects: increase commitment, understand more WHY they have these goals, increase performance |
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Common elements in an MBO program are: |
- goal specific - participative decision making: employees and supervisors make decisions together - specific time period - performance feedback |
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Appraiser discomfort |
if appraisal process is cutting into a mangers time many managers don't like the process |
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factors that distort appraisals: |
1) leniency error 2) halo error 3) similarity error 4) low appraiser motivation 5) central tendency 6) inflationary pressures 7) inappropriate substitutes |
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lack of objectivity |
factors like attitude, appearance, loyalty, initiative are difficult to measure - factors may have little to do with employees job performance, sometimes supervisors just don't like the person |
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Leniency error |
- each evaluator has his/her own value system: some evaluate high (positive leniency) and others low (negative leniency) - opposite of strictness - could be positive or negative: positive = performance is overstated / negative or strictness = performance is understated, unfairly critical of employees performance - if there is one one rater evaluating than the error is not as critical. problem is when there is multiple raters and one is lenient and other is strict and the company isn't doing anything about it. |
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Halo error |
- evaluator lets an assessment of an individual on one trait influence evaluation on all traits |
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Horn error |
use one negative trait or feature and overgeneralize with it |
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to address halo error issue: |
- reverse wording: write questions like "this employee is disorganized" and "illogical or this employee was unable to find ways to help customers" so that everything is not positive and the rater has to consider each question separately - rate all employees on one trait at a time, all on leadership, all on customer service etc. |
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similarity error |
- evaluator rates others in the same way that the evaluator perceives him or herself - if you see yourself a certain way and you find it to be a vulnerable quality then you may evaluate other based on those qualities |
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low appraiser motivation |
- evaluator may be reluctant to give an accurate appraisal if it means the employee may not attain expected rewards as a result - when results are tied to motivation like pay increases or promotion then appraisers don't want to be responsible for someone not getting a raise, so they hold back and don't provide a true evaluation |
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central tendency |
- the reluctance to use the extremes of a rating scale resulting in all employees being rated close to average - tend to evaluate all your employees by using the middle of the scale, you avoid extremes - incorrectly rating all employees near average so all the results are the same - some evaluation systems require raters to provide justifications when certain employees receive extremely high or low ratings so raters may avoid that because its more work |
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inflationary pressures |
- rater feels pressures for equality or fear of retribution from unhappy employees - rater ranks employees better than they deserve to avoid conflict |
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inappropriate substitutes for performance |
- effort, enthusiasm, appearance, are less relevant for some jobs than others - traits someone prefers but has nothing to do with the job |
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attribution theory |
- evaluations are affected based on wether someone's performance is due to: internal factors they can control or external factors they can't control - good job = you did it on your own - bad job = its not your fault, its the bad teacher etc - when you look at others its opposite |
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When is judgement harsher? |
when poor performance is attributed to an internal control than an external control |
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To create better performance management systems: |
1) use behavior based measures 2) combine absolute and relative standards 3) provide ongoing feedback 4) job related criteria 5) performance expectations 6) standardization 7) use multiple raters 8) rate selectively 9) train appraisers 10) do process |
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behavior based measures |
- they're more job related and elicit more inter-rater agreement than traits such as "loyalty" or "friendliness" - more accurate |
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combine absolute and relative standards |
- absolute standards tends to be positively lenient - relative standards suffer when there is little variability |
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provide ongoing feedback |
- expectations and disappointments should be shared with employees on a frequent basis - there should be few surprises in performance review |
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job related criteria |
- use the most basic criterion needed in employee performance appraisals - take out anything thats not job related |
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performance expectations |
- managers and subordinates have to agree on performance expectations in advance otherwise you cant expect employees to perform well - if your employees understand the expectations they can evaluate their own performance and make timely adjustment as they go instead of waiting for yearly evaluations |
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standardization |
firms should use the same evolution instrument for all employees who work for the same supervisor in the same job category |
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multiple raters: |
- the more used, the more reliable and valid the results - peer evaluations, upward evaluations and 360 degree appraisals are evaluated by everyone |
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advantages of peer evaluations |
- coworkers may be able to provide more constructive insight - recommendations may be more specific- coworkers understand day to day tasks better than supervisors |
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rate selectively |
- Appraisers should evaluate only in areas about which they have sufficient knowledge, they should be organizationally close the individual being evaluated, and should be an effective rater - supervisors can't rate performance on something they don't have sufficient knowledge of |
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train appraisers |
poor/inaccurate appraisals can demoralize employees and increase legal liabilities |
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Do process |
- provides employees opportunity to appeal appraisal results - must have procedures for pursuing grievances and having them addressed objectively |
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for an effective performance appraisal meeting:
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- Prepare/schedule meeting in advance - Create supportive aura about meeting - Describe appraisal’s purpose - Involve employee in appraisal discussion - Focus on behaviors, not employee - Cite specific examples - Give positive and negative feedback - Ensure employee understood appraisal - Generate a development plan |
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challenges in evaluating oversees employees: |
- different cultural perspectives and expectations between the parent and local country may make evaluation difficult - evaluation forms may not be translated accurately - quantitative measures may be misleading |
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Total compensation: |
total rewards given to employees for provided services |
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direct financial compensation |
wages, salary, bonuses, and commissions |
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indirect financial compensation |
benefits; all other financial rewards not paid directly to the employee |
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non-financial compensation: |
satisfaction from the job itself or from psychological and/or physical environment in which the employee works |
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one common threat for compensation rewards: |
to help employees maintain their commitment |
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intrinsic rewards |
- participation in decision making - greater job freedom - more responsibility - opportunities for growth - diversity of activities |
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performance based rewards financial / extrinsic |
- bonuses - piecework - commission - incentive plans - merit pay plans |
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implied membership based rewards financial / extrinsic |
- cost of living increase - labor market adjustment - profit sharing - time in rank increase |
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explicit membership based rewards financial / extrinsic |
- protection program - pay for time not worked - services/perks |
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non financial rewards extrinsic |
- assigned parking space - preferred assignments - business cards - own secretary - impressive title |
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intrinsic rewards |
come from the job itself - pride in ones work - feelings of accomplishment - being part of a work team |
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extrinsic rewards |
come from a source outside the job, mainly by management - money - promotions - benefits |
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what used to be a benefit but now a business necessity? |
workplace flexibility |
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financial rewards |
- wages - bonuses - profit sharing - pension plans - paid leaves - purchase discounts |
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non financial rewards |
- make life on the job more attractive - employees vary on the rewards they prefer |
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performance based |
rewards are tied to specific job performance criteria- not including base salaries etc - commissions - piecework pay plans - incentive systems - group bonuses - metrit pay |
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membership- based |
rewards are offered to all employees- more companies lean towards these rewards compared to performance based - cost of living increases - benefits - salary increases - seniority - credentials - specialized skill - future potential: future value you could bring to the organization |
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which type of rewards do managers prefer vs labor unions? |
managers = performance based labor unions = membership/seniority based |
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job evaluation |
defines the appropriate worth of each job |
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how do companies derive their compensation programs ? |
job evaluation |
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how do you know how much to pay a certain position? |
compensation administration |
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Fair Labor Standards Act (FLSA) requires: |
- minimum wage - overtime pay - record keeping - child labor restrictions |
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exempt employees from the FMLA |
- include professional and managerial employees not covered under overtime provisions - loop hole: any type of "manager" you're exempt regardless of salary; company physician or attorney, account executive, outside sales person - anyone not listed above are eligible for over time pay |
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purpose of the FLSA act: |
- eliminate low wages - reduce long working hours - most significant law affecting compensation |
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What is the equal pay act of 1963? |
requires that men and women hired for the same job be paid the same - affects initial salary, raises don't necessarily stay the same |
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Civil Rights Act: |
- broader than Equal Pay Act - prohibits discrimination on the basis of gender - used to support comparable worth concept - salaries established based on skill, responsibility, effort and working conditions |
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What does job analysis information do? |
determines the relative value or rank of each job in the organization |
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other pay structure factors: |
- labor market conditions - collective bargaining - individual skill difference |
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ordering method aka ranking method |
- a committee places jobs in a simple rank order from highest (worth highest pay) to lowest - not ranking the people, ranking the jobs - simplest method - rater examine descriptions of each job and rank them - LIMITATION: not effective when theres a large number of jobs |
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classification method |
- jobs placed in grades to compare their descriptions to the benchmarked jobs. Look for common denominator - comparing job descriptions against class descriptions - result: general schedule - LIMITATION: not effective when theres a large number of jobs |
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Point method |
- jobs are rated and allocated points on several criteria - jobs with similar point totals are placed in similar pay grades. Offers the greatest stability - break job down into several categories then assigning points for each category - sum of all categories give a quantitative assessment of jobs total worth - Most stable because job descriptions can change but once each category has points then the scale won't change - LIMITATION: costly and time consuming |
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compensation surveys |
- used to gather factual data on pay rates for other organizations. - information is often collected on associated employee benefits as well - as current employees or old employees that had the same job in the past |
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wage curves |
- drawn by plotting job evaluation data (such as job points or grades) against pay rates (actual or from survey data) - indicates whether pay structure is logical |
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wage strucure |
designates pay ranges for jobs of similar value. results in a logical hierarchy of wages, in overlapping ranges |
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external factors that influence pay structure: |
- geographic differences (local supply and demand) - labor supply (low supply = higher wages and vice versa) - competition (HR can math, lead, or lag) - cost of living as determined by the CPI - collective bargaining (unions) |
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Incentive compensation plans: |
1) individual 2) origination-wide 3) group incentives can be added to the basic pay structure to provide rewards for performance |
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individual incentives on top of bases |
- merit pay plans (annual increase, based on performance) - piecework plans (pay based on number of units produced typically in a specified time period) - time savings bonuses and commissions |
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where do individual incentives work best? |
clear objectives are set and tasks are independent |
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differential piece rate plans: |
1) you're up to standard 2) exceed standard: get more than minimal base rate not so popular anymore because its not feasible for most plants |
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time savings bonuses and commissions: |
you produce an hours work in less than an hour, you get a bonus problems: may go too fast- overlook things, not be careful, avoid things not tied to a reward even if they're still your responsibility, start to cut corners |
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bonuses |
one time financial award based on productivity that is not added to base pay |
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Group incentives |
Incentives can be offered to groups,rather than individuals, when employees' tasks are interdependent and requirecooperation. |
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Advantages of group incentives: |
- Focuses the group onspecific performance targets. - Since rewards arecontrollable by individuals, the programs can be very motivational. - The program can beintegrated with other corporate initiatives and leads to improved communicationand employee relations |
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disadvantages of group incentives: |
- Can be costly toinstall and administer. - De-emphasizesindividual performance, may create excessive peer pressure. - Requires opencommunication with employees on costs, profitability, etc. If the performancetargets are not carefully selected, adverse results may occur. |
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Organization wide incentives |
direct employee toward organization goals (such as cost reduction) |
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2 most popular Gainsharing plans: |
1) Scanlon plan - supervisor and employees committees suggest labor saving improvements 2) IMPROSHARE - formula is used to determine bonuses based on labor cost savings |
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vesting |
normallyemployees have to wait a specified period, vesting determines the amount ofprofit shares that is owed to employees |
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Profit sharing |
- Distributing predetermined percentages of company profits to workers - Everyonegets a piece of the incentive -Focuseson ends 3 types: CurrentProfit Sharing, DeferredProfit Sharing, CombinationPlans |
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Current Profit Sharing: |
Provide payments to employees in cash or stock as soon as profits have been determined |
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Deferred Profit Sharing: |
Placing company contributions in a trust that’s available to employees at retirement, termination or death |
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Combination Plans: |
Partial share of profits on current basis with deferred payment of the rest |
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Gainsharing: |
- Binds employees to firmsproductivity and provides incentive payments based on improved companyperformance - Differences: profit sharing focuseson the ends, the dollar amount &everyone gets the same as long as you are a member of the organization; gainsharing: only get incentive if youcontributed to the saving of costs - Goal:improve efficiency, reduce costs and improve profitability – how we get there,the means - Helpsalign employees with an organizations strategy, sometimes organizations may notbe focused on increasing revenue, may be focused on things like expansion whichmeans they’ll be focused on performance more than profitability |
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Scanlon Plan: |
- reward to employees for savings in labor costs resulting from employees suggestions; employee-management committees are the people who evaluate these suggestions -System for participative management |
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Improved Productivity through Sharing “IMPROSHARE”: |
- use a specific mathematical formula to determine bonuses; depending on formula, if employees are saving costs then a portion of the savings will go to the employees - Limitations: difficult to see an individual effort, paid out annually, when bonuses are large and reoccurring people expect it yearly so it looses motivational value |
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Paying for performance: |
1) competency based compensation 2) broad-banding |
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competency based compensation: |
- rewarded for skills, knowledge, and behaviors - leadership - problem solving - decision making - strategic planning |
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broad-banding |
- pre set pay levels that determine what people are paid based on their type and level of competency - techniquethat collapses many pay or salary grades into afew wide bands to improve organizational effectiveness - Createsbasis for a simpler compensation system that deemphasizes structure and placesgreater importance on flexible decision making - Maypromote lateral development and reduce demand for scarce vertical promotions |
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team based compensation |
- incentives for empowered work teams to exceed established goals and share equally in rewards - depends on: > clarity of team purpose > ability of the team to obtain needed resources > effective tram communication skills and trust |
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salaries of top managers: |
- Executive pay can run 400 times higherthan that of the average worker - Competition for executive talent raisesthe price of hiring an executive - High salaries can be a motivator forexecutives and lower-level managers |
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supplemental financial compensation: |
1) deferred bonuses: golden handcuffs 2) stock options 3) hiring bonuses |
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deferred bonuses: golden handcuffs |
- Paid to executives over extended timeperiods, to encourage them to stay with the company - Restrictive but good, trying to keepexecs in the company so they don’t get these if they leave |
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stock options |
- allow executives to purchase stock in the future at a fixed price - set the price now, if company isdoing well, stocks go up and execs get to purchase at a lower price– motivationto lead the company well to get stocks up |
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hiring bonuses |
- compensate for the deferred compensation lost when leaving a former company - If an executive voluntarily leaves,they forfeit deferred bonuses. If they’re leaving to go somewhere else, someplaces will compensate the loss of deferred bonuses with hiring bonuses |
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supplemental non financial compensation prerequisites: |
- club memberships - company cars - paid life insurance - expense accounts - supplemental retirement accounts - post retirement consulting contracts - supplemental disability insurance - mortgage assistance - interest free loans - free financial, legal and tax counseling |
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Golden parachutes |
- Protect executives when a merger orhostile takeover occurs by providingseverance pay or a guaranteed position withinthe same company - Nota voluntary termination of employment, they’reforced to leave |
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golden handshake |
a significant severance package–still receive when fired since it’s not voluntary
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Claw back contract provision: |
also be in executive contracts, allows the company to recover compensation if subsequent review indicates that payments were not calculated accurately or performance goals were not met |
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International compensation packages generally utilize the "balance sheet approach" using these 4 factors: |
1) base pay 2) differentials 3) incentives 4) assistance programs |
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base pay |
pay of employees in comparable jobs at home |
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differentials |
- compensation given to offset higher costs of living abroad - "hardship Differentials" to compensate employees who are living in difficult places to compensate for the their added inconvenience |
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incentives |
inducements given to encourage employees to accept oversees assignments |
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assistance programs |
- payment for expenses involved in moving a family abroad and in providing some services overseas - families have to go too- send parents first to get settled, tutoring for kids |
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Taxation |
- Haveto pay taxes where they live, AND even though they’re not here in theU.S.- still have to pay income taxes; ityou earn less than 97,000 abroad then you are exempt for US income taxes butmust file for it - Ifyou make more than 97,000 then you’re being taxed both places and companiesrealize that and have programs to protect employees: companies willcompensate/reimburse you that money |
