Ethical Dilemmas in Human Resources Management Business Paper Need to write 2 full pages essay, total word count :700 ETHICAL DILEMMAS IN HR MANAGEMENT A
Ethical Dilemmas in Human Resources Management Business Paper Need to write 2 full pages essay, total word count :700
ETHICAL DILEMMAS IN HR MANAGEMENT
Assume that you are the human resource manager for a service organization. Your boss recently read that most employees underestimate the value of the benefits provided to them by their employer. He has instructed you to develop a plan for communicating
the costs of benefits to your employees. Although you agree that communicating this information is a good idea, he has instructed you to manipulate the information so that it looks better than the reality.
For example, your firm offers 10 sick days per year. The average employee takes only 8 days per year and forfeits the unused number of days. Your boss wants you to talk about this benefit as though everyone took their full allotment. Your firm offers two health-insurance options: a basic or standard plan and a premium plan. Both the com- pany and the individual pay more if the premium plan is chosen. He wants you to quote only the cost for the more expensive plan, even though more than half of your workers have chosen the standard plan.
When you questioned his ideas, your boss simply said, These are the potential costs that we could incur for everyone. Just because people dont take all their sick days or they select the basic insurance plan, thats their choice. The company is willing to pay for
10 sick days and for the high-end insurance. So we should get credit for being generous.
QUESTIONS
1. What are the ethical issues in this situation?
2. What are the basic arguments for and against what your boss is instructing you to do? 3. What do you think most managers would do? What would you do? 9
Compensation
and Benefits
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or duplicated, or posted to a publicly accessible website, in whole or in part.
LEARNING OUTCOMES
1. Describe the basic issues involved in
developing a compensation strategy
2. Discuss how organizations develop a
wage and salary structure
3. Identify and describe the basic issues
involved in wage and salary
administration
4. Discuss the basic considerations in
understanding benefit programs
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LEARNING OUTCOMES (Continued)
5. Identify and describe mandated benefits
6. Identify and describe nonmandated
benefits
7. Discuss contemporary issues in
compensation and benefits
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Compensation and Benefits
LO 1
Compensation: Set of rewards that
organizations provide to individuals for their
willingness to perform tasks
Benefits: Various items of value beyond
wages that employees receive from the
organization
Rewards
Incentives
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Basic Purposes of Compensation
LO 1
Provide appropriate and equitable rewards
to employees
Help employees focus on activities that the
organization considers important
Increase employee efforts along desired
lines
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LO 1
Internal and External Equity
Internal equity: Comparisons made by
employees to other employees within the
same organization
External equity: Comparisons made by
employees to others employed by different
organizations performing similar jobs
Pay surveys: Surveys of compensation paid to
employees by other employers in a particular
geographic area, industry, or occupational
group
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LO 1
Wage versus Salaries
Wages: Hourly compensation paid to
operating employees
Time acts as the basis for determining wages
Salary: Income paid to an individual on the
basis of performance, not on the basis of
time
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Figure 9.2
Strategic Options for Compensation
LO 1
©Cengage Learning®
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Determinants of Compensation Strategy
LO 1
Overall organizational strategy
Ability to pay
Ability to attract and retain employees
Ability to bargain with the unions
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LO 2
Job-Evaluation Methods
Classification system: Attempts to group
sets of jobs together into clusters
Point system: Requires managers to
quantify value of various elements of
specific jobs in objective terms
Point manual: Carefully and specifically defines
the degrees of points from first to fifth
Factor-comparison method: Assesses jobs on a
factor-by-factor basis using a factor-comparison
scale as a benchmark
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Pay for Knowledge and Skill-Based Pay
LO 2
Pay for knowledge: Involves compensating
employees for learning specific information
Skill-based pay: Rewards employees for
acquiring new skills
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LO 3
Wage and Salary Administration
Ongoing process of managing a wage and
salary structure
Issues related to compensation
Pay secrecy: Extent to which the compensation
of any individual in an organization is secret
Pay compression: Equal pay granted to
employees with different levels of experience, or
performance abilities, or both
– Pay inversion: New employees are paid more
than experienced employees
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Nature of Benefits Programs
LO 4
Most organizations provide their employees
with an array of benefits
Cost of benefits programs
Organizations spend huge amounts on benefits
Employees are asked to bear costs of benefits
Purposes of benefits programs
Attracts better-qualified people
Affects job satisfaction and subsequent turnover
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Mandated Benefits
LO 5
Unemployment insurance: Provides a basic
subsistence payment to employees who are
between jobs
Social security: Designed to provide limited
income to retired individuals
Workers compensation: Insurance cover
for individuals who suffer a job-related
illness or accident
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LO 5
Mandated Healthcare
Patient Protection and Affordable Health
Care Act, 2010
Aim is to:
– Increase the quality and affordability of
health-care insurance
– Lower the number of uninsured employees
– Reduce the cost of insurance for all involved
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LO 6
Nonmandated Benefits
Private pension plans: Provide income at
retirement
Defined benefit plans and defined contribution
plans
Paid time off
Other benefits
Wellness programs
Life-cycle benefits
Employee assistance plans and perquisites
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LO 7
Executive Compensation
Provided in two forms
Base salary
Some form of incentive pay
– Bonus
– Stock-option plan
Higher in the United States than in other
countries
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Legal Issues in Compensation and Benefits
LO 7
Fair Labor Standards Act includes provisions
for minimum wage, overtime, and child
labor
Comp time – Time off that is offered to
nonexempt workers in exchange for working
more than 40 hours with no overtime pay
Overtime rules may change
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Legal Issues in Compensation and Benefits
LO 7
(Continued)
Employee Retirement Income Security Act
(ERISA)
Protects employees who contributed to their
pensions but were unable to collect those
benefits later
Provides protection for the funding underlying
the pension plan
Same-sex partners are eligible to share
benefits
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Evaluating Compensation and Benefit
Programs
LO 7
Organizations that do not offer competitive
pay and benefit packages find it difficult to
attract employees
Also leads to high rates of voluntary turnover
Efficiency of benefit programs depend on
effective communication with employees
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KEY TERMS
Benefits
Cafeteria-style benefits
plans
Classification system
Compensation
Defined benefit plans
Defined contribution
plans
External equity
Factor-comparison
method
Internal equity
Job evaluation
Maturity curve
Pay compression
Pay for knowledge
Pay inversion
Pay secrecy
Pay surveys
Point manual
Point system
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KEY TERMS
Private pension plans
Salary
Skill-based pay
Social security
Unemployment insurance
Vesting rights
Wage and salary
Wages
Wellness programs
Workers compensation
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SUMMARY
To develop compensation strategies, firms
must first recognize the basic purposes of
compensation
Both traditional and strategic approaches
can be used to determine how an employee
must be compensated
Pay secrecy and pay compression affect
wage and salary administration
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HRM4 | CH9
23
SUMMARY
Most organizations provide mandated and
nonmandated benefits to the employees
Three contemporary issues in
compensation and benefits include:
Executive compensation
Growing legal issues
Evaluating compensation and benefit programs
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HRM4 | CH9
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