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30 Cards in this Set

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performance appraisals

evaluation to determine correspondence between worker behavior/outcomes and employer expectations

How to improve performance appraisals

-improve formats- rank vs ratings, standard (adjective) or behavior (BARS) or MBO (goal reaching outcomes)


-Select better raters -360- customer raters, supervisors, peers, and subordinates


-Understand rater process- keep diary of incidents, be aware of human fallacy and error


-train raters-

Balanced scorecard

weights performance based on customer satisfaction, employee internal growth and commitment, operational efficiency in internal processes, and financial measures

MBO

Management by Objective- both a planning and appraisal tool. at beginning of performance appraisal period, set clear, smart goals. At end of period, evaluate based on completion of goals

360 degree feedback

receiving feedback from many angles. ratings from supervisor, subordinates, peers, and customers. Requires a third party facilitator usually.

high comp and benefits consequences

-often taken for granted and not a significant motivator for employees despite high costs


-effects overall competitiveness of a firms


communicating benefits is difficult (facilitate with intranet) but employees do not know language


-30-40% of total comp



Affordable care act

passed by Obama in 2010. requires health insurance or pay a penalty. penalty for businesses with 50 or more employees who do not offer health insurance. more about coverage than cost.

medical insurance

most expensive benefit offered. listed as most important benefit that employees receive. Medical cost continue to rise exponentially and are more expensive in the US than any other country in the world. this creates a burden for organizations who have historically covered percent of medical rather up to a certain cost (defined benefit plan). wellness programs and encouraging healthy life styles can be a way to control costs.

pension/ pension plan

-a form of deferred compensation. 1) deferred com to former employee or surviving spouse for previous commitment to org. 2) specify a normal retirement age to become eligible. 3)formula for calculating the benefit. 4) provide for integration with social security benefits.


- second most expensive benefit especially with the exit of baby-boomer generation leaving the workforce ready to start collecting the benefits.

flexible benefits/ cafeteria style plan

employees have the option to pick and choose which benefits

defined benefit

employers establish their responsibility for a specific benefit, however, if the cost of that benefit rises, the employer is still responsible for the coverage negotiated and has to pay a higher cost.

defined contribution

employers define the limits of their contribution in terms of dollar amount so that if cost rise, the responsibility or burden on the employer does not. cost containment strategy.

who should be covered?

historically companies have offered far fewer part-time employees coverage. consider probationary periods for coverage, dependents of those covered, retirees, survivors of deceased employees, disabilities, employees during layoffs, strikes, or furloughs.

how should benefits be financed?

noncontributory- employer pays total cost




contributory- employer and employee share costs




employee financed (except those required by law)

advantages for flex-ben

1) satisfy unique needs


2) helps firms meet changing needs of workforce


3)increased involvement increases understanding of benefits


4)makes adding new benefits less costly


5)cost containment

disadvantages for flex-bem

1)employees make bad choices and find themselves not covered for predictable emergencies


2)administrative burdens and expenses increase


3)adverse selection- they pick benefits they will use therefor premiums are higher


4)subject to nondiscrimination requirements in Internal revenue code. (young and old choose differently ect)



employer factors in choosing benefits

-relationship to total comp (consider part of total comp)


-cost of those benefits


-competitiveness


- attraction, retention, and motivation


-legal requirements

employee factors in choosing benefits

-equity compared to other sectors and groups of employees


-personal needs

ENRISA

employee retirement income security act




sets guidelines and regulations for companies who offer pension plans (not a mandatory benefit)




pension benefit guaranty corporation offers cop to employees promised pensions by orgs who have gone bankrupt





COBRA

Consolidate Omnibus Budget Reconciliation Act




law that allows a resigned or laid-off employee (through no fault of their own) continue to receive medical coverage on the employer plan but pays for it themselves.



Benefits Communications

what is communicated, to whom it is communicated to, how it communicated, how frequently it is communicated.




Can be facilitated through use of intranet (e-benefits)




manuals should be accompanied by videos and meetings.




failure to understand benefit is root cause of dissatisfaction





benefits cost containment strategies

deductibles- claimant pays fee before making insurance claim


coinsurance- portion of insurance premium is paid by employee


benefits cutbacks- corresponds withe wage concessions- negotiate o eliminate employer contributions for some benefits


defined contribution plan- dollar limitations


benefits ceiling- max payout for certain benefits


dual coverage- use spousal benefits instead



Dodd Frank Act

requires all public companies to report the ratio of CEO pay relative to the median pay for employees. say on pay voting (non-binding)

SEC

Securities Exchange Commission-


oversight agency for Dodd Frank Act



executive pay mix considerations

-base pay


-short-term annual incentives


-long-term incentives and capital appreciation plans


-prerequisites (executive perks)

stock compensation vs stock option compensation

stock- employee owns stock regardless of market fluctuations (if bought at $30 and drops to $10, they get $10)




options- employee only makes profit from option (bought at $30 but market drops to $10, they receive no money)

option pricing models

used to estimate current value of stock




black-scholes model

why employees are chosen for expat assignments

opportunity to develop international perspective, confidential assignment only entrusted with certain employee, particular skills not possessed by locals,

expat pay package

salary- usually stays the same


taxes- differences paid by employer. tax equalization


housing- place to live


allowances and premiums- cost of living, child care and education, spousal employment





balanced score sheet appraoch

maintains same spending power of expats in new county by paying for differences in pay package.