BHR 4680 UNIT_IV_ASSESSMENT
When an employment offer is being presented, what are the key things you look for in accepting the position? (200 words) There are three key things that I look for when an employment offer is presented. The first is the compensation, specifically the base pay. I’m looking to make sure that the base pay is exactly what we talked about. It is important that it meets my expectations because it ultimately affects my way of living. If the pay is not what we agreed upon than I still have an opportunity to discuss it. The second thing that I look at is the job description. I review it to ensure that all my duties are clear and concise, and they are what were previously presented. This is important because I do not what to have an open-ended job description, meaning that my supervisor can task me with additional duties without properly compensating me or try to demote me for not performing the additional duties. The last thing that I look for is the start date. This is important because I want to make sure the start date aligns with my personal and professional plans. I want to ensure that I am at the right place at the right time to start my new job and I don’t have anything else on my agenda. Ensuring that all appointments are taken care of for myself and my family is important because paid time off does not typically accrue right away.
Match the terms with the correct definition. Question Correct Match D. External competitiveness Refers to the pay relationships among organizations; the organization's pay relative to its competitors F. Pay level Refers to the average of the array of rates paid by an employer E. Pay mix Refers to the various types of payments or pay forms that Selected Match D. Refers to the pay relationships among organizations; the organization's pay relative to its competitors F. Refers to the average of the array of rates paid by an employer E. Refers to the various types of payments or pay forms that
make up total compensation make up total compensation
compensation The complete pay package, The complete pay package, including all forms of money, including all forms of money,
bonuses, benefits, services, and bonuses, benefits, services, and
stock options stock options
Ability to pay
The ability of a firm to meet The ability of a firm to meet employee wage demands while employee wage demands while remaining profitable remaining profitable
2. Identify the three types of pay-level policies. Explain each.
The three types of pay-level policies are lead, lag, and match. The lead pay level policy maximizes the ability to attract and retain quality employees and minimizes employee dissatisfaction with pay (Newman, Gerhart, Milkovich, 2017). The con to the lead pay-level policy is that internal misalignment can occur within an organization if employers don’t pay current employees the same pay and it also doesn’t guarantee a higher level of performance from employees. The lag pay-level policy is a wage structure that is set to match market rates at the beginning of the year, however the internal rates will begin to lag behind market value throughout the remainder of the year. The purpose of the lag pay-level policy is to offset labor cost, but it may hinder a firm’s ability to attract and retain quality employees (Newman, Gerhart, Milkovich, 2017). The match pay-level policy is that employers will match the market pay rates paid by other employers. The base pay is set around the 50-percentile range.
Newman, J. M., Gerhart, B., & Milkovich, G. T. (2017). Compensation (12th ed.). New York, NY: McGraw-Hill/Irwin.
3. Discuss what shapes external competitiveness from the pay mix standpoint.
There are three factors that shape external competitiveness from the pay mix standpoint; they are competition in the labor market factor, competition in the product market factor, and unique organizational factors (Newman, Gerhart, Milkovich, 2017). The labor market factor focuses on the supply and demand of an employee with a specialized skill. The demand side of the labor market focuses on the employer, are they in need of the potential employee and if, so how many are they willing and able to hire. The supply side concerns the actions of the potential employee, what are their qualifications and how much pay are their willing to accept. If an employer is in demand for more potential employees than there are available this could increase the market pay rate. Product market competition factors shape external competitiveness from the pay mix standpoint, because if a company is in a highly competitive industry and they cannot generate enough revenue than it affects their ability to have competitive compensation packages. An organization’s unique characteristics influence the pay mix such as the size of an organization, their business strategy, and the industry they are in and the amount of technology their workers use.
4. Identify the parts that make up total compensation (pay mix). Explain the percentage breakdown for direct and indirect compensation, which makes up total compensation.
There are four main parts of the total compensation that make up a pay mix, which are fixed base pay, incentive pay, benefits, and stock options. There are various alternatives to pay mix that employers can offer employees, depending on what is the best fit for the employee. The percentage breakdown for direct and indirect compensation varies depending on the type of mix pay compensation an employee chooses. The base pay for a mix pay compensation package can range from 50%-80%, with benefits ranging from 15%-30%, bonuses from 0%-17%, and options from 0%-10%. For instance, a performance driven pay mix may have a guarantee base pay of 50%, a bonus of 17%, benefits with 17%, and other options of 16%. This type of package is geared towards high performing risk-taking employees.
5. Discuss pay-for-performance plans.
A pay-for-performance plan is when employees are paid based off their production, vice being paid an agreed upon salary for the time that they spend at work. Pay for performance plans require standards to be set by organizations such as objectives, measures, eligibility, and funding. Pay for performance can come in several different plans such as merit pay, bonus plans, skill based pay, incentive plans, and variable pay plans. The type of plan that an employer decides to use is based on the organization’s goals, compensation philosophy, and the budget. Pay for performance can have many benefits for an organization such as an increase in employee motivation, an increase in productivity, better retention, and cuts in cost.