BA 100 Chapter 11

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CHAPTER 11
Human Resource
Management:
Finding and
Keeping the Best
Employees

2. ©McGraw-Hill Education.
LEARNING OBJECTIVES 1 of 3
1. Explain the importance of human resource
management, and describe current issues in
managing human resources.
2. Illustrate the effects of legislation on human resource
management.
3. Summarize the five steps in human resource
planning.
4. Describe methods that companies use to recruit new
employees, and explain some of the issues that
make recruitment challenging.

3. ©McGraw-Hill Education.
LEARNING OBJECTIVES 2 of 3
5. Outline the six steps in selecting employees.
6. Illustrate employee training and development
methods.
7. Trace the six steps in appraising employee
performance.
8. Summarize the objectives of employee compensation
programs, and evaluate pay systems and fringe
benefits.

4. ©McGraw-Hill Education.
LEARNING OBJECTIVES 3 of 3
9. Demonstrate how managers use scheduling plans to
adapt to workers’ needs.
10. Describe how employees can move through a
company: promotion, reassignment, termination, and
retirement.

5. ©McGraw-Hill Education.
TONY HSIEH
Zappos
• Hsieh sold his first company
to Microsoft for $265
million, before becoming
Zappos’ CEO.
• Changed Zappos’ corporate
work environment so reps
wow
customers.
• The work environment is
kept open and accessible.
Photocredit:©BradSwonetz/Redux

6. ©McGraw-Hill Education.
NAME that COMPANY
This company manages its global workforce of about
100,000 employees and 100,000 subcontractors with
a database that matches employee skills,
experiences, schedules, and references with jobs
available.
Name that company!

7. ©McGraw-Hill Education.
HUMAN RESOURCE
MANAGEMENT 1 of 2 LO 11-1
Human Resource Management (HRM) -- The
process of determining human resource needs and then
recruiting, selecting, developing, motivating, evaluating,
compensating and scheduling employees to achieve
organizational goals.
HRM’s role has grown because of:
1. Increased recognition of employees as a resource.
2. Changes in law that rewrote old workplace
practices.

8. ©McGraw-Hill Education.
HUMAN RESOURCE
MANAGEMENT 2 of 2 LO 11-1
Jump to Appendix 1 for long image description

9. ©McGraw-Hill Education.
UNCOVERING the SECRETS of HRM
Things Your HR Manager Doesn’t Tell You LO 11-1
We’re short-staffed and under pressure too.
We’re not always going to be able to help in the way you
hope.
We can help you move up the career ladder.
What you post on Facebook can get you fired.
Source: Smart Money, www.smartmoney.com, accessed November 2014.

10. ©McGraw-Hill Education.
DEVELOPING the FIRM’S
ULTIMATE RESOURCE LO 11-1
Service and high-tech manufacturing requires
employees with highly technical job skills.
Such workers are scarce,
making recruiting and
retention more important
and more difficult.
The human resource job is
now the job of all managers
in an organization.
Photo credit: © Tim Boyle/Bloomberg/Getty Images

11. ©McGraw-Hill Education.
CHALLENGES in FINDING
HIGH-LEVEL WORKERS LO 11-1
• A shortage of trained workers in key areas
• Worker shortage in skilled trades
• An increasing number of baby boomers who delay
retirement
• A declining economy with fewer full-time jobs
• Expanding global markets with low-wage workers
• Increasing benefit demands and benefit costs
• A decreased sense of employee loyalty

12. ©McGraw-Hill Education.
CIVIL RIGHTS ACT of 1964 LO 11-2
Title VII prohibits discrimination in hiring, firing,
compensation, apprenticeships, training, terms,
conditions or privileges of employment based on:
- Race
- Religion
- Creed
- Sex
- Age
- National Origin
Photo credit: Library of Congress Prints and Photographs Division [LC-DIG-ppmsca-03128

13. ©McGraw-Hill Education.
1972 EQUAL EMPLOYMENT
OPPORTUNITY ACT (EEOA) LO 11-2
• Strengthened the Equal Employment Opportunity
Commission (EEOC).
• Gave EEOC the right to issue workplace
guidelines for acceptable employer conduct.
• EEOC could mandate specific recordkeeping
procedures.
• EEOC was vested with the power of enforcement.

14. ©McGraw-Hill Education.
CONTROVERSIAL PROCEDURES
of the EEOC LO 11-2
Affirmative Action -- Policy designed to “right past
wrongs” by increasing opportunities for minorities and
women.
Reverse Discrimination -- Discriminating against
members of a dominant or majority group (e.g. whites or
males) usually as a result of policies designed to correct
previous discrimination against minority or
disadvantaged groups.
This policy has been at the center of many debates
and lawsuits.

15. ©McGraw-Hill Education.
CIVIL RIGHTS ACT of 1991
and OFCCP LO 11-2
Civil Rights Act of 1991
- Amended Title VII and gave victims of discrimination
the right to a jury trial and possible damages.
Office of Federal Contract Compliance Programs
(OFCCP)
- Ensures that employers doing business with the
federal government comply with the
nondiscrimination and affirmative action laws.

16. ©McGraw-Hill Education.
LAWS PROTECTING
EMPLOYEES with DISABILITIES LO 11-2
Americans with Disabilities Act of 1990 (ADA)
- Requires employers to give applicants with physical or
mental disabilities the same consideration for
employment as people without disabilities.
- Passage in 2008 of Americans with
Disabilities Amendments Act
expanded protection.
- 2011 saw regulations that widen
the range of disabilities covered by
the ADA and shift the burden of
proof of disability from employees
to employers. Photo credit: © Andersen Ross/The Image Bank/Getty Images

17. ©McGraw-Hill Education.
AGE DISCRIMINATION in EMPLOYMENT
ACT (ADEA) LO 11-2
Age Discrimination in Employment Act (ADEA)
Protects workers 40 and over from
employment and workplace
discrimination in hiring, firing,
promotion, layoff, compensation,
benefits, job assignments and
training.
Photo credit: Caia Image/Glow Images

18. ©McGraw-Hill Education.
MINDING the LAW in HRM LO 11-2
• Employers must know the
law and act accordingly.
• Legislation affects all areas
of HRM.
• Court cases highlight that
sometimes it’s proper to go
beyond providing equal
rights.
• Changes in law and
legislation occur regularly.
Photo credit: Design Pics / Kelly Redinger

19. ©McGraw-Hill Education.
TEST PREP
1. What is human resource management?
2. What did Title VII of the Civil Rights Act of 1964
achieve?
3. What is the EEOC and what was the intention of
affirmative action?
4. What does accommodations mean in the
Americans with Disabilities Act of 1990?

20. ©McGraw-Hill Education.
HUMAN RESOURCE PLANNING
PROCESS LO 11-3
1. Preparing a human resource
inventory of employees.
2. Preparing a job analysis.
3. Assessing future human
resource demand.
4. Assessing future labor supply.
5. Establishing a strategic plan.
Photo Credit: © Sam Edwards / age fotostock

21. ©McGraw-Hill Education.
WHAT’S a JOB ANALYSIS? LO 11-3
Job Analysis – A study of what employees do who
hold various job titles.
Job Description – A summary of the objectives of the
job, the type of work, the responsibilities and duties,
working conditions and relationship to other jobs.
Job Specifications -- A summary of the minimum
qualifications needed to do a particular job.

22. ©McGraw-Hill Education.
RECRUITING EMPLOYEES LO 11-4
Recruitment -- The set of activities for obtaining the
right number of qualified people at the right time.
Human resource managers use both internal and
external sources to recruit employees.
Small businesses often make use of web sources
like CareerBuilder and Monster to recruit
employees.

23. ©McGraw-Hill Education.
COMPETING for the
CREAM of the CROP
To survive, small businesses must recruit and retain
qualified workers.
Unfortunately, they lack the resources of larger
companies to compete for employees.
Small businesses need innovations like:
- Letting staff help recruit and select candidates.
- Audition an employee.
- Seek out publicity.

24. ©McGraw-Hill Education.
EMPLOYEE SOURCES LO 11-4
Jump to Appendix 2 for long image description

25. ©McGraw-Hill Education.
SELECTION LO 11-5
Selection -- The process of gathering information and
deciding who should be hired, under legal guidelines, to
serve the best interest of the individual and the
organization.
Photo credit: © AVAVA/iStock/360/Getty Images RF

26. ©McGraw-Hill Education.
STEPS in the
SELECTION PROCESS LO 11-5
1. Obtaining complete application forms
2. Conducting initial and follow-up interviews
3. Giving employment tests
4. Conducting background investigations
5. Obtaining results from physical exams
6. Establishing trial (probationary) work periods

27. ©McGraw-Hill Education.
OOPS!
Areas Where Job Applicants Make Mistakes LO 11-5
Jump to Appendix 3 for long image description
Source: USA Today.

28. ©McGraw-Hill Education.
KEEPING the RIGHT FACE
on FACEBOOK
Your online personality be appealing to employers.
Some of the worst things to do are:
- Posting provocative or inappropriate photos.
- Information on drug use or excessive drinking.
- Bad mouthing a previous employer.
- Discriminatory comments related to race, gender, religion,
etc.

29. ©McGraw-Hill Education.
HIRING CONTINGENT WORKERS LO 11-5
Contingent Workers -- Include part-time and
temporary workers, seasonal workers, independent
contractors, interns and co-op students.
• There are about 5.7 million
contingent workers in the
U.S.
• Majority of contingent
workers are under 25.
Photo credit: © Ben Margot/ AP Images

30. ©McGraw-Hill Education.
WHY HIRE
CONTINGENT WORKERS? LO 11-5
Companies hire contingent workers:
- When full-time workers are on leave.
- During periods of peak demand.
- In uncertain economic times.
- To save on employee benefits.
- To screen candidates for future employment.

31. ©McGraw-Hill Education.
STUDENTS and the
CONTINGENT WORKFORCE LO 11-5
With temporary staffing agencies, companies have
easier access to screened workers.
Worker information is entered into their databases.
When students come back
to town, they can call the
agency and ask them to put
their names into the system
for work.
Photo credit: © Norman Pogson / Alamy

32. ©McGraw-Hill Education.
INTERN or
INDENTURED SERVANT?
With few entry-level positions available, interns can
end up in an unpaid position for as long as six
months with no chance of advancement.
Some businesses give interns lots of responsibility; a
Toronto paper fired all paid staff and replaced them
with unpaid interns.
Is it ethical for companies to use unpaid interns if
they know they don’t have jobs to offer or if the
unpaid internships replace paid jobs?

33. ©McGraw-Hill Education.
TEST PREP 1 of 3
1. What are the five steps in human resource
planning?
2. What factors make it difficult to recruit qualified
employees?
3. What are the six steps in the selection process?
4. Who is considered a contingent worker, and why
do company hire such workers?

34. ©McGraw-Hill Education.
TRAINING and DEVELOPING
EMPLOYEES LO 11-6
Training and Development -- All
attempts to improve productivity by
increasing an employee’s ability to
perform.
Training focuses on short-term skills.
Development focuses on long-term
abilities.
Photo credit: © Mike Brown/The Commercial Appeal/AP Images

35. ©McGraw-Hill Education.
THREE STEPS of TRAINING
and DEVELOPMENT LO 11-6
1. Assessing organization needs and employee
skills to develop appropriate training needs.
2. Designing training activities to meet identified
needs.
3. Evaluating the training’s effectiveness.

36. ©McGraw-Hill Education.
MOST COMMONLY USED TRAINING
and DEVELOPMENT ACTIVITIES LO 11-6
• Orientation
• On-the-Job Training
• Apprenticeships
• Off-the-Job Training
• Online Training
• Vestibule Training
• Job Simulation
Photo credit: © Corbis Premium RF / Alamy Stock Photo

37. ©McGraw-Hill Education.
DEVELOPING EFFECTIVE
MANAGERS LO 11-6
Management Development -- The process of training
and educating employees to become good managers
and monitoring the progress of their skills over time.
Management training includes:
- On-the-job coaching
- Understudy positions
- Job rotation
- Off-the-job courses and training

38. ©McGraw-Hill Education.
WHY GOOD EMPLOYEES QUIT LO 11-6
Jump to Appendix 4 for long image description
Source: Robert Half International

39. ©McGraw-Hill Education.
USING NETWORKS and
MENTORING LO 11-6
Networking -- Establishing and maintaining contacts
with key managers in and out of the organization and
using those contacts to develop relationships.
Mentors -- Managers who supervise, coach and guide
selected lower-level employees by acting as corporate
sponsors.
Networking and mentoring go beyond the work
environment.

40. ©McGraw-Hill Education.
APPRAISING PERFORMANCE
on the JOB LO 11-7
Performance Appraisal -- An evaluation that
measures employee performance against
established standards in order to make decisions
about promotions, compensation, training or
termination.
A 360-degree review gives
managers opinions from
people at different levels to
get a more accurate idea of
the worker’s ability. Photo credit: Jose Luis Pelaez Inc/Blend Images LLC

41. ©McGraw-Hill Education.
SIX STEPS of PERFORMANCE
APPRAISALS LO 11-7
1. Establishing performance standards that are
understandable, measurable and reasonable.
2. Clearly communicating those standards.
3. Evaluating performance against the standards.
4. Discussing the results with employees.
5. Taking corrective action.
6. Using the results to make decisions.

42. ©McGraw-Hill Education.
DOs and DON’Ts of
PERFORMANCE APPRAISALS LO 11-7
Jump to Appendix 5 for long image description

43. ©McGraw-Hill Education.
MAJOR USES of
PERFORMANCE APPRAISALS LO 11-7
• Identify training needs
• Use as a promotion tool
• Recognize worker’s achievements
• Evaluate the firm’s hiring process
• Judge the effectiveness of the firm’s orientation
process
• Use as a basis for possible termination of a worker

44. ©McGraw-Hill Education.
PERFORMANCE APPRAISAL MISTAKES
Common Problems Made While Reviewing Employees LO 11-7
Contrast Effect - Comparing one employee to another.
Halo/Horn Effect - Allowing performances in specific
areas to unfairly influence overall performance
evaluation.
Similar-to-Me Effect - Generosity to those you feel are
more like you.

45. ©McGraw-Hill Education.
TEST PREP 2 of 3
1. Name and describe four training techniques.
2. What’s the primary purpose of a performance
appraisal?
3. What are the six steps in a performance
appraisal?

46. ©McGraw-Hill Education.
COMPENSATION PROGRAMS LO 11-8
A managed and competitive compensation program
helps:
- Attract the kinds of employees the business needs.
- Build employee incentive to work efficiently and
productively.
- Keep valued employees from going to competitors or
starting their own firm.
- Maintain a competitive market position by keeping costs
low due to high productivity from a satisfied workforce.
- Provide employee financial security through wages and
fringe benefits.

47. ©McGraw-Hill Education.
TYPES of PAY SYSTEMS 1 of 3 LO 11-8
Jump to Appendix 6 for long image description

48. ©McGraw-Hill Education.
TYPES of PAY SYSTEMS 2 of 3 LO 11-8
Jump to Appendix 7 for long image description

49. ©McGraw-Hill Education.
TYPES of PAY SYSTEMS 3 of 3 LO 11-8
Jump to Appendix 8 for long image description

50. ©McGraw-Hill Education.
COMPENSATING TEAMS LO 11-8
Team-based pay programs are more challenging
than individual pay systems.
The two most common methods for teams involve:
- Skill-Based: Pay is increased as skill increases.
(Eastman Chemical uses this system.)
- Gain-Sharing: Pay is increased as performance
increases. (Nucor Steel uses this system.)

51. ©McGraw-Hill Education.
FRINGE BENEFITS on the JOB LO 11-8
Fringe Benefits -- Sick leave, vacation pay, pension
and health plans that provide additional compensation to
employees beyond base wages.
In 1929, fringe benefits accounted for less than 2%
of payroll cost. Today it’s about 30%.
Healthcare has been the most significant increase in
fringe benefit cost.

52. ©McGraw-Hill Education.
HEALTHCARE, a PERK NOT
to be TAKEN LIGHTLY LO 11-8
Compare all the costs, not just
premiums.
Take part in wellness
programs. The average
wellness bonus is $386!
Order generic drugs when you
need prescriptions filled.
Source: Kiplinger’s Personal Finance, November 2010.
Photo credit: © Zefa RF / Alamy

53. ©McGraw-Hill Education.
WHO PAYS for
EMPLOYEE BENEFITS? LO 11-8
• 74% of full-time workers
have employee-provided
retirement plans.
• 39% of part-time workers
have employee-provided
retirement plans.
• 71% of workers have
medical care benefits.
Source: Entrepreneur, www.entrepreneur.com, accessed November 2014.
Photo credit: © LAMB / Alamy

54. ©McGraw-Hill Education.
The RANGE of
FRINGE BENEFITS LO 11-8
Fringe benefits include incentives like:
- Company cars
- Country club memberships
- Recreation facilities
- Special home mortgage rates
- Paid and unpaid sabbaticals
- Day-care and elder care services
- Dental and eye care
- Legal counseling
- Short or compressed work weeks
Photo credit: Ivan Mikhaylov/123RF

55. ©McGraw-Hill Education.
SPECIAL PERKS at
DREAMWORKS LO 11-8
• Free DVDs and screenings of
current films.
• Free breakfast and lunch plus dinner
when working late.
• Free snack rooms on every floor.
• Profit sharing.
• Ping-Pong and poker tournaments
during work hours.
Photo credit: © Paramount Pictures/Photofest

56. ©McGraw-Hill Education.
CAFETERIA-STYLE and
SOFT BENEFITS LO 11-8
Cafeteria-Style Fringe Benefits -- Allow employees
to choose the benefits they want (up to a certain dollar
amount).
Soft Benefits include:
- Onsite haircuts and shoe repair
- Concierge services
- Free meals at work
- Doggie daycare
- Onsite farmer’s markets
Photo credit: ©Martin Valigursky/Alamy

57. ©McGraw-Hill Education.
LET’S GO to the BEACH!
Average Vacation Days by Country LO 11-8
Jump to Appendix 9 for long image description
Source: Reuters, June 24, 2010.

58. ©McGraw-Hill Education.
CULTURAL CHALLENGES
without CONFLICT
Managers need to understand the business needs of
each country they operate in.
- Compensation: Conversion to foreign currencies and
special allowances often are needed.
- Health and Pension Standards: Benefits are different
country-by-country.
- Paid Time Off: Vacation time, sick and personal leave
vary.
- Taxation: Tax policies vary.
- Communication: Employees can feel disconnected in
other countries.

59. ©McGraw-Hill Education.
FLEXIBLE SCHEDULING PLANS LO 11-9
Flextime Plan -- Gives employees some freedom to
choose which hours to work as long as they work the
required number of hours or complete their tasks.
Compressed Work Week -- Employees work the full
number of work hours, but in fewer than the standard
number of days.
Job Sharing -- Lets two or more part-time employees
share on a full-time job.

60. ©McGraw-Hill Education.
USING FLEXTIME PLANS LO 11-9
Most flextime plans require Core Time -- When all
employees are expected to be at their job stations.
Flextime is difficult to incorporate into shift work and
managers have to work longer hours.
Communication among employees can also be
difficult under flextime and managers have to be
alert to any system abuses.

61. ©McGraw-Hill Education.
A FLEXTIME CHART LO 11-9
Jump to Appendix 10 for long image description

62. ©McGraw-Hill Education.
COMPRESSED WORK WEEKS LO 11-9
• Employees enjoy long
weekends after working long
days.
• Productivity is a concern.
• Nurses and firefighters often
work compressed work
weeks.
Photo credit: ©Jose Luis Pelaez Inc/Blend Images LLC

63. ©McGraw-Hill Education.
HOME-BASED WORK 1 of 2 LO 11-9
Bank of America has My Work that permits
employees to work remotely about 60% of the time.
About 13 million Americans
work from home at least
several days a month.
12% of U.S. businesses
use some home-based
work.
Photo credit: © Liam Norris/Cultura/Getty Images RF

64. ©McGraw-Hill Education.
HOME-BASED WORK 2 of 2 LO 11-9
Jump to Appendix 11 for long image description

65. ©McGraw-Hill Education.
VIRTUALLY THERE
Tools to Help You Work From Home LO 11-9
Communication:
- Google Apps
- Skype
- Yammer
Collaboration:
- Google Docs
- GoToMeeting
- Dropbox
Photo credit: ©LWA/Dann Tardif/Blend Images LLC

66. ©McGraw-Hill Education.
GOING NOWHERE FAST
Worst Commutes in the World LO 11-9
Jump to Appendix 12 for long image description
Source: Bloomberg Businessweek, www.businessweek.com, accessed November 2014.

67. ©McGraw-Hill Education.
JOB SHARING BENEFITS LO 11-9
• Provides employment opportunities for many
people who cannot work full time.
• Workers tend to be enthusiastic and productive.
• Absenteeism and tardiness are reduced.
• Employers can schedule part-time workers in peak
demand periods.

68. ©McGraw-Hill Education.
MOVING EMPLOYEES LO 11-9
• Employees are promoted or
reassigned.
• Employees are terminated
due to performance or
economic situations.
• Employees retire.
Photo credit: (c) Ingram Publishing / Alamy

69. ©McGraw-Hill Education.
TERMINATING EMPLOYEES LO 11-10
As the economic crisis grew, more and more
employers have had to lay off employees.
Even when the economy is booming, employers are
hesitant to hire full-time workers because of the cost
of termination.
Firing employees is more difficult
for employers because of laws
preventing termination for certain
acts.
Photo credit: © Steve Cole/Getty Images RF

70. ©McGraw-Hill Education.
PLAYING HOOKY
Crazy Excuses for Missing Work LO 11-10
• I woke up in a good mood and didn’t want to ruin it.
• I just put a casserole in the oven.
• I caught my uniform on fire by putting it in the
microwave to dry
• I had been at the casino all weekend and still had
money left to play with on Monday morning.
• I accidentally got on a plane.
Source: Forbes, www.forbes.com, accessed November 2014.

71. ©McGraw-Hill Education.
TEST PREP 3 of 3
1. Name and describe five alternative compensation
techniques.
2. What advantages do compensation plans such
as profit sharing offer an organization?
3. What are the benefits and challenges of flextime?
Telecommuting? Job sharing?

72. ©McGraw-Hill Education.
Appendix 1: HUMAN RESOURCE
MANAGEMENT 2 of 2
Organization goals
Human resource management
Recruitment
Selection
Training and Development
Motivation (chapter 10)
Evaluation
Compensation and benefits
Scheduling
Employee-union relations (chapter 12)
Career management
All of this occurs within the legal environment.
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73. ©McGraw-Hill Education.
Appendix 2: EMPLOYEE SOURCES
External sources used to find qualified candidates are: private
employment agencies, public employment agencies, personal
applications, management consultants, new graduates, former
employees, part-time applicants, competing organizations, union
organizations, advertisements, temporary help services, union halls,
trade schools, college placement offices, newspaper ads, trade
associations, business associates, college professors, internet, job
fairs, and cooperative education internships.
Internal sources used to find qualified candidates are: transfers,
promotions, employee recommendations, retrained employees, and
department reorganizations.
After the human resource department has pulled qualified candidates
from external or internal sources, the candidates follow the sequence of
the hiring process: selection, hiring, orientation and training.
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74. ©McGraw-Hill Education.
Appendix 3: OOPS!
Areas Where Job Applicants Make Mistakes
Interview, 32 percent
Resume, 21 percent
Cover letter, 9 percent
Reference checks, 9 percent
Follow-up interview, 7 percent
Screening call, 6 percent
Other/Don’t know, 16 percent
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75. ©McGraw-Hill Education.
Appendix 4: WHY GOOD EMPLOYEES QUIT
Unhappy with management, 35 percent
Limited advancement, 33 percent
No recognition, 13 percent
Inadequate salary/benefits, 13 percent
Boredom, 1 percent
No specific reason, 5 percent
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76. ©McGraw-Hill Education.
Appendix 5: DOs and DON’Ts of
PERFORMANCE APPRAISALS
• DO allow sufficient time, without distractions, for appraisal. (Turn off
the phone or close the office door.)
• DO include the employee in the process as much as possible. (Let
the employee prepare a self-improvement program.)
• DO end the appraisal with positive suggestions for employee
improvement.
• DON’T attack the employee personally. Critically evaluate his or
her work.
• DON’T make the employee feel uncomfortable or uneasy. Never
conduct an appraisal where other employees are present (such as
on the shop floor).
• DON’T wait until the appraisal to address problems with the
employee’s work that have been developing for some time.
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77. ©McGraw-Hill Education.
Appendix 6: TYPES of PAY SYSTEMS 1 of 3
Salary: Fixed compensation computed on weekly, biweekly, or monthly
pay periods (e.g., $1,600 per month or $400 per week). Salaried
employees do not receive additional pay for any extra hours worked.
Hourly wage or daywork: Wage based on number of hours or days
worked, used for most blue-collar and clerical workers. Often
employees must punch a time clock when they arrive at work and when
they leave. Hourly wages vary greatly. The federal minimum wage is
$7.25, and top wages go as high as $40 per hour or more for skilled
craftspeople. This does not include benefits such as retirement
systems, which may add 30 percent or more to the total package.
Piecework system: Wage based on the number of items produced
rather than by the hour or day. This type of system creates powerful
incentives to work efficiently and productively.
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78. ©McGraw-Hill Education.
Appendix 7: TYPES of PAY SYSTEMS 2 of 3
Commission plans: Pay based on some percentage of sales. Often
used to compensate salespeople, commission plans resemble
piecework systems.
Bonus plans: Extra pay for accomplishing or surpassing certain
objectives. There are two types of bonuses: monetary and cashless.
Money is always a welcome bonus. Cashless rewards include written
thank-you notes, appreciation notes sent to the employee’s family,
movie tickets, flowers, time off, gift certificates, shopping sprees, and
other types of recognition.
Profit-sharing plans: Annual bonuses paid to employees based on the
company’s profits. The amount paid to each employee is based on a
predetermined percentage. Profit sharing is one of the most common
forms of performance-based pay.
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79. ©McGraw-Hill Education.
Appendix 8: TYPES of PAY SYSTEMS 3 of 3
Gain-sharing plans: Annual bonuses paid to employees based on
achieving specific goals such as quality measures, customer
satisfaction measures, and production targets.
Stock options: Right to purchase stock in the company at a specific
price over a specific period. Often this gives employees the right to buy
stock cheaply despite huge increases in the price of the stock. For
example, if over the course of his employment a worker received
options to buy 10,000 shares of the company stock at $10 each and the
price of the stock eventually grows to $100, he can use those options to
buy the 10,000 shares (now worth $1 million) for $100,000.
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80. ©McGraw-Hill Education.
Appendix 9: LET’S GO to the BEACH!
Average Vacation Days by Country
Japan: 17 vacation days given, 9 days taken off
United States: 17 vacation days given, 14 days taken off
Australia: 20 vacation days given, 17 days taken off
Germany: 30 vacation days given, 28 days taken off
Canada: 20 vacation days given, 18 days taken off
United Kingdom: 28 vacation days given, 25 days taken off
Italy: 33 vacation days given, 28 days taken off
Spain: 32 vacation days given, 30 days taken off
France: 38 vacation days given, 35 days taken off
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81. ©McGraw-Hill Education.
Appendix 10: A FLEXTIME CHART
This graphic illustrates a flexible work schedule. Flexible
hours can be scheduled between 6:30 a.m. and 6:30 p.m.
The core work times are 9:30 to 11:00 a.m. and 2:00 to
3:00 p.m. The lunch period is between 11:00 a.m. and 2:00
p.m. Sarah’s work schedule is outlined on the chart. She
starts work at 7:00 a.m., eats lunch from 11:00 to 11:30
a.m., and leaves work for the day at 3:30 p.m.
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82. ©McGraw-Hill Education.
Appendix 11: HOME-BASED WORK
Benefits to the organization: increases productivity due to fewer sick days, fewer absences, higher
job satisfaction, and higher work performance ratings; broadens available talent pool; reduces costs of
providing on-site office space
Benefits to the individual: makes more time available for work and family by reducing or eliminating
commute time; reduces expenses of buying and maintaining office clothes; avoids office politics; helps
balance work and family; expands employment opportunities for individuals with disabilities
Benefits to society: decreases traffic congestion; discourages community crime that might otherwise
occur in bedroom communities; increases time available to build community ties
Challenges to the organization: makes it more difficult to appraise job performance; can negatively
affect the social network of the workplace and can make it difficult to promote team cohesiveness;
complicates distribution of tasks (should office files, contact lists, and such be allowed to leave the
office?)
Challenges to the individual: can cause feeling of isolation from social network; can raise concerns
regarding promotions and other rewards due to being out of sight, out of mind; may diminish
individual’s influence within company due to limited opportunity to learn the corporate culture
Challenges to society: increases need to resolve zoning regulations forbidding business deliveries in
residential neighborhoods; may reduce ability to interact with other people in a personal, intimate
manner
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83. ©McGraw-Hill Education.
Appendix 12: GOING NOWHERE FAST
Worst Commutes in the World
Communities are ranked from 1 to 100 with 100 being the
worst.
Beijing, China: 99
Mexico City, Mexico: 99
Johannesburg, South Africa: 97
Moscow, Russia: 84
New Delhi, India: 81
Sao Paulo, Brazil: 75
Los Angeles: 25
New York: 19
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