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 don’t take all their sick days or they select the basic insurance plan, that’s 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
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
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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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9
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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17
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
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
HRM4 | CH9
21
KEY TERMS
•
•
•
•
•
•
•
•
•
•
Private pension plans
Salary
Skill-based pay
Social security
Unemployment insurance
Vesting rights
Wage and salary
Wages
Wellness programs
Workers’ compensation
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
HRM4 | CH9
22
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
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
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
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
HRM4 | CH9
24
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
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