Deck 11: Total Rewards and Compensation

Question 1

HR Ethics: To Pay or Not to Pay?
The Department of Labor (DOL) changed its interpretation of pay laws in December 2017 to permit for-profit companies to also use unpaid interns if the main beneficiary of the assignment is the intern rather than the organization. The DOL adopted a "primary beneficiary" test to determine whether a particular internship could be unpaid.
-Is it ethical for a for-profit enterprise to utilize unpaid interns? Consider both small, start-up companies and large, well-established organizations. Would the same ethical standards apply to firms in both categories?

Answer 1

Students' answers will vary.

Question 2

HR Ethics: To Pay or Not to Pay?
The Department of Labor (DOL) changed its interpretation of pay laws in December 2017 to permit for-profit companies to also use unpaid interns if the main beneficiary of the assignment is the intern rather than the organization. The DOL adopted a "primary beneficiary" test to determine whether a particular internship could be unpaid.
-How would you feel if a for-profit company "hired" you as an unpaid intern and you produced usable output for the firm during the internship? At what point would you demand to be paid as an intern?

Answer 2

Students' answers will vary.

Question 3

HR Competencies & Applications: Is It Better to Know?
Key Competencies: Critical Evaluation (Behavioral Competency) and Organization (Technical Competency)
Some experts on compensation support the idea of full pay transparency, whereby every employee in a company is allowed to know what everyone else is paid. Full pay transparency can work in two situations. First, if pay levels are based on rank and tenure (as in many union contracts and government agencies), then pay is not determined by performance or other factors. The second is when members of the organization can easily see how well everyone else is performing. The organizational culture and work environment must be appropriate for introducing full pay disclosure while maintaining collaboration and harmony within the work group.
-How should companies address the perceptions of inequity when they are not able to or willing to disclose individual worker pay levels within the organization? How would you feel if your employer announced that they plan to open the payroll records for everyone to see?

Answer 3

Students' answers will vary. Companies can address the perception of inequity by emphasizing the fact that the U.S. economy is built on fair competition. A worker with valuable unique skills should be paid more than others.

Question 4

HR Competencies & Applications: Is It Better to Know?
Key Competencies: Critical Evaluation (Behavioral Competency) and Organization (Technical Competency)
Some experts on compensation support the idea of full pay transparency, whereby every employee in a company is allowed to know what everyone else is paid. Full pay transparency can work in two situations. First, if pay levels are based on rank and tenure (as in many union contracts and government agencies), then pay is not determined by performance or other factors. The second is when members of the organization can easily see how well everyone else is performing. The organizational culture and work environment must be appropriate for introducing full pay disclosure while maintaining collaboration and harmony within the work group.
-What information should companies share with employees relative to the employee's personal pay determination and general policies regarding pay decisions? How should the needs of employees be addressed in these strategies?

Question 5

HR Competencies & Applications: Point Factor Example
Key Competencies: Critical Evaluation (Behavioral Competency) and Organization (Technical Competency)
A job analyst studies a position, selects the characteristics needed for the position, and assigns points to each characteristic. The total number of points places the job in a grade.
-How would you identify a job's compensable factors?

Question 6

HR Competencies & Applications: Point Factor Example
Key Competencies: Critical Evaluation (Behavioral Competency) and Organization (Technical Competency)
A job analyst studies a position, selects the characteristics needed for the position, and assigns points to each characteristic. The total number of points places the job in a grade.
-How would you determine what are appropriate levels for a job's compensable factors?

Question 7

HR Competencies & Applications: Tracking Time and Motion
Key Competencies: Critical Evaluation, Relationship Management, Business Acumen; HR Expertise: People/Total Rewards, Organization/Technology & Data
An industrial engineer or job analyst conducts a time-and-motion study by observing workers performing the job. The observer times each task with a stopwatch and takes notes. The engineer or analyst uses the information to calculate the time for each task and the time needed to produce a unit of the product.
-If you were a worker being observed during a time and motion study, what possible reactions might you have to the process? How might your emotions impact your performance during the study?

Question 8

HR Competencies & Applications: Tracking Time and Motion
Key Competencies: Critical Evaluation, Relationship Management, Business Acumen; HR Expertise: People/Total Rewards, Organization/Technology & Data
An industrial engineer or job analyst conducts a time-and-motion study by observing workers performing the job. The observer times each task with a stopwatch and takes notes. The engineer or analyst uses the information to calculate the time for each task and the time needed to produce a unit of the product.
-What concerns would you have as a manager who was undertaking a time and motion study to establish incentive pay rates?

Question 9

HR Competencies & Applications: Getting Free Riders Off the Train
Key Competencies: Relationship Management, Ethical Practice; HR Expertise: People/Total Rewards, Organization/Organizational Effectiveness & Development
Free riding is a common problem in teams. The following guidelines can reduce free riding: making small teams, dividing complex tasks, matching the task to the worker's priorities, and being transparent.
-Consider a time when you worked on a class project or a project at work and some members of the team didn't pull their weight. How did you deal with it? What were the results?

Question 10

HR Competencies & Applications: Getting Free Riders Off the Train
Key Competencies: Relationship Management, Ethical Practice; HR Expertise: People/Total Rewards, Organization/Organizational Effectiveness & Development
Free riding is a common problem in teams. The following guidelines can reduce free riding: making small teams, dividing complex tasks, matching the task to the worker's priorities, and being transparent.
-What can work group leaders do to identify and deal with free riders on a work team?

Question 11

Think of an organization where you have worked. What were its compensation policies, and how were they communicated to employees?

Question 12

Recently, larger companies have been in the news because of violations of overtime regulations. How should your Human Resources department protect itself from these devastating claims? Brainstorm some ideas on how to prevent these issues from occurring.

Question 13

Discuss why variable pay-for-performance plans have become popular and what elements are needed to make them successful.

Question 14

What are some key performance indicators (KPIs) that are used by organizations in which you have been employed? How did managers explain the importance of these KPIs, and were any rewards tied to them?

Question 15

You are the HR Director for an insurance company with regional offices in several states. For each office, you want to be sure that the administrative assistants reporting to the regional manager are paid appropriately.
A. Go to www.salary.com to find geographic pay survey data for this job in Hartford, Connecticut; Atlanta, Georgia; Omaha, Nebraska; and Phoenix, Arizona.
B. Then recommend pay ranges, identifying the low, median, and high rates for each pay range.
C. To present the data, list each of the offices in order from lowest median pay to highest median pay.

Question 16

Case: Should Private-Sector Employees Get Compensatory Time?
A bill that entitles one and one half hours of time off for each overtime hour worked, effectively giving private-sector employees the same options as those in the public sector, was introduced recently.
-What would be the advantages and disadvantages for employers to allow private-sector workers to utilize comp time rather than payment for overtime worked? What would be the advantages and disadvantages for employees if they were allowed to utilize comp time rather than payment for overtime worked?

Question 17

Case: Should Private-Sector Employees Get Compensatory Time?
A bill that entitles one and one half hours of time off for each overtime hour worked, effectively giving private-sector employees the same options as those in the public sector, was introduced recently.
-Would you prefer to have the flexibility for comp time or payment rather than only being paid for overtime worked? If you were a line manager, would you prefer this for your direct reports? Why?

Question 18

Establishing Pay at United Grinding Technologies Incorporated
This case describes how a company dealt with identifying competitive pay rates for its 140 employees. Since a number of jobs were not standard in the industry, the HR staff tapped BLS and trade association pay surveys to help set appropriate pay levels. (For the case, visit MindTap at www.cengage.com/login.)
-How would you evaluate Taylor's approach for developing a pay structure at United Grinding Technologies? Would you have done anything differently?

Question 19

Establishing Pay at United Grinding Technologies Incorporated
This case describes how a company dealt with identifying competitive pay rates for its 140 employees. Since a number of jobs were not standard in the industry, the HR staff tapped BLS and trade association pay surveys to help set appropriate pay levels. (For the case, visit MindTap at www.cengage.com/login.)
-If you were to develop a pay structure in a company where you have worked, how would you approach doing it? What are the potential challenges associated with implementing your approach?

Question 20

Want to Earn a Bonus? Work for Uncle Sam
This case describes how several federal agencies distributed bonus payments despite serious infractions or ethical violations committed by employees. The inadequacy of congressional oversight in such matters contributes to the inconsistency in rewarding inappropriate behavior. (For the case, visit MindTap at www.cengage.com/login.)
-What dynamics at the IRS and VA may have contributed to actions employee took to earn a bonus?

Question 21

Want to Earn a Bonus? Work for Uncle Sam
This case describes how several federal agencies distributed bonus payments despite serious infractions or ethical violations committed by employees. The inadequacy of congressional oversight in such matters contributes to the inconsistency in rewarding inappropriate behavior. (For the case, visit MindTap at www.cengage.com/login.)
-What recommendations would you have for using incentive programs at these agencies in the future?

Question 22

Want to Earn a Bonus? Work for Uncle Sam
This case describes how several federal agencies distributed bonus payments despite serious infractions or ethical violations committed by employees. The inadequacy of congressional oversight in such matters contributes to the inconsistency in rewarding inappropriate behavior. (For the case, visit MindTap at www.cengage.com/login.)
-If you were able to vote on this pay package ("say on pay"), how would you vote and why?

Question 23

Is the FLSA a Dinosaur?
This case identifies how the Fair Labor Standards Act might need to be reformed because of restrictions caused by workweek definitions. (For the case, visit MindTap at www.cengage.com/login.)
-Does the 40-hour workweek still make sense? Would you recommend changing to a "pay period" calculation for overtime? For example, if a company pays workers every two weeks, should hours over 80 in a pay period be used to determine overtime rather than 40 in a week?

Question 24

Is the FLSA a Dinosaur?
This case identifies how the Fair Labor Standards Act might need to be reformed because of restrictions caused by workweek definitions. (For the case, visit MindTap at www.cengage.com/login.)
-How should nonexempt workers track their time spent away from work doing tasks such as responding to e-mail or text messages?

Question 25

Is the FLSA a Dinosaur?
This case identifies how the Fair Labor Standards Act might need to be reformed because of restrictions caused by workweek definitions. (For the case, visit MindTap at www.cengage.com/login.)
-Would you recommend that private sector employers be permitted to offer nonexempt employees compensatory time off rather than pay for overtime hours worked?

Question 26

Pay for Performance Enhances Employee Management at Scripps Health
This case discusses how a hospital uses pay for performance to improve employee productivity. (For the case, visit MindTap at www.cengage.com/login.)
-Discuss how this case illustrates how compensation can be used as a method for improving employee satisfaction and motivation.

Question 27

Pay for Performance Enhances Employee Management at Scripps Health
This case discusses how a hospital uses pay for performance to improve employee productivity. (For the case, visit MindTap at www.cengage.com/login.)
-Identify some of the ways that performance-based pay systems should be developed based on the experiences at Scripps Health.

Question 28

Best Buy Pays Big Bucks for CEO
This case deals with CEO pay for a newly hired executive at Best Buy. (For the case, visit MindTap at www.cengage.com/login.)
-Was Joly overpaid?

Question 29

Best Buy Pays Big Bucks for CEO
This case deals with CEO pay for a newly hired executive at Best Buy. (For the case, visit MindTap at www.cengage.com/login.)
-What factors probably led to this pay package?

Question 30

Best Buy Pays Big Bucks for CEO
This case deals with CEO pay for a newly hired executive at Best Buy. (For the case, visit MindTap at www.cengage.com/login.)
-If you were able to vote on this pay package ("say on pay"), how would you vote and why?

Question 31

Sodexo Incentives
This case shows how a large firm uses recognition and awards. (For the case, visit MindTap at www.cengage.com/login.)
-Based on the Sodexo example, discuss the importance of widespread incentives in improving both the culture and employee retention efforts in a firm.

Question 32

Sodexo Incentives
This case shows how a large firm uses recognition and awards. (For the case, visit MindTap at www.cengage.com/login.)
-How might having employees receive recognition and incentives at a national level impact the performance of their coworkers and colleagues?

Question 33

On the Job Video: Tough Mudder-Compensation
This short video will help reinforce key points and may prompt additional discussion from the class.
-As Alex Patterson, the vice president of brand at Tough Mudder, points out, it is important to pay people a wage that indicates that they are valued for what they do. But Tough Mudder also compensates its employees in other ways. What other forms of compensation does Tough Mudder use, and how effective do you think these forms of compensation are?
Tough Mudder uses many different forms of compensation. Jesse Bull points out that the company produces "a really cool product" and that is a key reward for many employees. Alex Patterson points out that the company offers employees the chance to go to conferences and outside training so they can improve their skills, and they give employees a flexible work schedule so they can get out of the office and go running, take yoga classes, or go surfing. In addition, he points out that people are motivated by working with people they like and just having fun. Most of these rewards are intangible, but they are an important part of a total reward system, so it is likely that they are effective in motivating Tough Mudder employees.

Question 34

On the Job Video: Tough Mudder-Compensation
This short video will help reinforce key points and may prompt additional discussion from the class.
-If Tough Mudder wants to be sure that their employees are being paid fairly, what steps should they take to make that happen?
Tough Mudder can judge the fairness of their pay in two ways - first by comparing what they pay to what other companies pay and second by conducting a job evaluation analysis to be sure that jobs are being compensated on the basis of their value to the company.

Question 35

On the Job Video: Tough Mudder-Compensation
This short video will help reinforce key points and may prompt additional discussion from the class.
-Based solely on the material in the video, would you say that Tough Mudder uses an entitlement philosophy or a performance philosophy? Why?
Based on the material in the video, Tough Mudder uses an entitlement philosophy. There is no discussion about linking pay to performance. Instead, managers point out that all employees get a training stipend, and they are allowed to have flexible work schedules so that they do not need to be tied to their desks every day. In addition, managers talk about challenge, the opportunity of getting outside of one's comfort areas, and the ability to work with people one likes as parts of the total reward system. All of these rewards are available to everyone in the company, and they don't increase based on employee performance.