Week One Discussion: 500 Word Min. This week's discussion covers HRD Skill requirements for managers. Before entering the discussion board, please review pages 16 - 19 in the course text. (Pictures Below) Question:“What are the core competencies or skills an HRD manager must have, and how are they acquired? “ Week One Discussion : 500 Word Min. This week's discussion covers HRD Skill requirements for managers. Before entering the discussion board, please review pages 16 - 19 in the course text . (Pictures Below) Question: “What are the core competencies or skills an HRD manager must have, and how are they acquired ? “ Week One Discussion: 500 Word Min. This week's discussion covers HRD Skill requirements for managers. Before entering the discussion board, please review pages 16 - 19 in the course text. (Pictures Below) Question: “What are the core competencies or skills an HRD manager must have, and how are they acquired? “ MHR 6901, Compensation Management 1 Course Learning Outcomes for Unit VI Upon completion of this unit, students should be able to: 5. Explain workers’ compensation. 5.1 Convince others that executive compensation is too high or is just right. 5.2 Identify compensation rules that apply to the flexible workforce. Course/Unit Learning Outcomes Learning Activity 5.1 Unit VI Essay 5.2 Unit VI Quiz Reading Assignment Chapter 11: Compensating Executives Chapter 12: Compensating the Flexible Workforce: Contingent Employees and Flexible Work Schedules Unit Lesson So far in this course, we have talked about how compensation is used and the components of a compensation system. Let us review these a bit before we move into compensating executives. Typically, compensation is used to recruit and retain highly qualified employees. The organization’s business strategy (lead, lag, or match strategy) determines how the organization recruits and retains employees. A good compensation system also increases morale or at least maintains employee satisfaction. As mentioned earlier in the course, compensation systems include wages and benefits. A good compensation system is one that evaluates the employees’ needs and makes adjustments, where possible, to meet those needs. Employees who have their needs satisfied are more likely to be productive and loyal to the organization, which, in turn, reduces costs for the organization. This is great for the average worker, but what about the organization’s executives? Executive compensation is a challenge for most organizations and is a highly controversial subject, especially after the government bailouts in 2008 and 2009. Executive compensation is different than that for most salary or hourly employees and can consist of a variety of options. It is generally focused on generating profits and long-term growth and is considered contingent compensation, which means that the pay is structured to reward or pay based on th ...

1. Week One Discussion: 500 Word Min.
This week's discussion covers HRD Skill requirements for
managers.
Before entering the discussion board, please review pages 16 -
19 in the course text. (Pictures Below)
Question:“What are the core competencies or skills an HRD
manager must have, and how are they acquired? “
Week One
Discussion
:
500 Word Min.
This week's discussion covers HRD Skill requirements for
managers.
Before entering the discussion board, please review pages 16
-
19 in the course text
.
(Pictures Below)
Question:
“What

2. are the core competencies or skills an HRD manager must have,
and how are they acquired
?
“
Week One Discussion: 500 Word Min.
This week's discussion covers HRD Skill requirements for
managers.
Before entering the discussion board, please review pages 16 -
19 in the course text. (Pictures Below)
Question: “What are the core competencies or skills an HRD
manager must have, and how are they acquired? “
MHR 6901, Compensation Management 1
Course Learning Outcomes for Unit VI
Upon completion of this unit, students should be able to:
5. Explain workers’ compensation.
5.1 Convince others that executive compensation is too high or
is just right.
5.2 Identify compensation rules that apply to the flexible
workforce.
Course/Unit
Learning Outcomes

3. Learning Activity
5.1 Unit VI Essay
5.2 Unit VI Quiz
Reading Assignment
Chapter 11: Compensating Executives
Chapter 12: Compensating the Flexible Workforce: Contingent
Employees and Flexible Work Schedules
Unit Lesson
So far in this course, we have talked about how compensation is
used and the components of a
compensation system. Let us review these a bit before we move
into compensating executives.
Typically, compensation is used to recruit and retain highly
qualified employees. The organization’s business
strategy (lead, lag, or match strategy) determines how the
organization recruits and retains employees. A
good compensation system also increases morale or at least
maintains employee satisfaction. As mentioned
earlier in the course, compensation systems include wages and
benefits. A good compensation system is one
that evaluates the employees’ needs and makes adjustments,
where possible, to meet those needs.
Employees who have their needs satisfied are more likely to be
productive and loyal to the organization,

4. which, in turn, reduces costs for the organization. This is great
for the average worker, but what about the
organization’s executives? Executive compensation is a
challenge for most organizations and is a highly
controversial subject, especially after the government bailouts
in 2008 and 2009.
Executive compensation is different than that for most salary or
hourly employees and can consist of a variety
of options. It is generally focused on generating profits and
long-term growth and is considered contingent
compensation, which means that the pay is structured to reward
or pay based on the organization’s
performance and the shareholder’s value. Therefore,
compensation must support the shareholder’s goals as
well as the goals and objectives of the organization. Normally,
executive compensation consists of the
following components:
-term incentives or bonuses,
-term incentives,
The annual base salary is the direct compensation for the
executive. The salary is generally competitive and
approved by a board of directors. There are tax implications for
executive salaries, and normally a chief

5. UNIT VI STUDY GUIDE
Executive Compensation and
Flexible Workforce Compensation
MHR 6901, Compensation Management 2
UNIT x STUDY GUIDE
Title
executive salary is limited to $1 million for cash compensation
and tax deductions. Salary beyond the $1
million is usually in the form of annual bonuses or long-term
incentives.
Short-term incentives for executives are usually related to
company performance and goals set by the board
of directors.
Long-term incentives are usually the largest part of an
executive’s compensation plan because they are
intended to push the executive to meet the strategic objectives
and maximize the shareholder’s value. Long-
term incentives are typically in terms of equity compensation
for a period of three to five years. The incentive
is not paid for the executive until the end of the performance
period.
Defined and deferred contribution plans are similar to those

6. available to salaried employees.
Perquisites (or perks) refer to the extra benefits that hourly and
salaried employees normally would not be
entitled to and include things such as a personal driver, secured
communication in the home, company jet,
bodyguards, etc. These perks provide for the safety and security
of the chief executive officer (CEO) and his
or her family as well as the CEO’s availability.
Severance pay refers to payments provided to executives in case
of voluntary or involuntary terminations.
Often, the severance agreement accompanies a non-compete or
good reason provision to protect the
organization. Severance pay is different than a golden parachute
in that a golden parachute protects the
executive’s pay in case of a merger or acquisition. The golden
parachute option allows the executive to work
on the sale or merger in the best interest of the shareholders
rather than being worried about finding a new
job.
It is important to remember that executive compensation
packages are developed by a board of directors with
the organization's strategy, decision-making, and value creation
in mind. Executive compensation is
influenced by corporate management and federal law and is
highly regulated.
Another area that creates a challenge for compensation systems
is the contingent worker. Today’s workforce
has a variety of workers: part-time, full time, temporary, on-
call, and independent contractors who we call
contingent workers. A contingent worker is classified as an
individual whose employment is based on
business needs. Retail organizations, for example, often hire

7. seasonal workers during the summer or holidays
to meet customer demands. Contingent workers make up 30–
40% of the U.S. workforce.
For businesses, temporary workers allow the organization to
have a flexible workforce when needed versus
maintaining employees on the payroll who are not productive.
Hiring and firing costs are high within most
organizations. Temporary workers reduce this cost for the
organization. The organization has access to labor
for shorter periods of time without a long-term commitment and
without the cost of benefits.
Recent studies suggest that temporary workers tend to be
female, younger than the average worker, and less
likely to have an advanced degree. Most temporary workers are
in transportation and material moving,
production, or office and administrative support, and they
typically work for a lower rate. For some people,
temporary work allows for a better work-life balance or an
opportunity to try other jobs in other industries.
Temporary work also means reduced wages, unpredictable
hours, little job security, and no benefits. This can
create a challenge for the organization. It should be noted that
there are two types of part-time employees:
those who choose to work fewer than 35 hours per week and
those who work fewer than 35 hours per week
because they cannot find full-time work. It is not uncommon for
people to work two or more part-time jobs.
There are different rules when working with a contingent
workforce. Certain federal, state, and even city laws
have severe consequences if you violate the rules, intentionally
or unintentionally. The biggest challenge
when hiring a contingent workforce is misclassification. For
example, the organization might hire an

8. independent contractor as a 1099 worker (not paying
employment taxes) and then have the Internal Revenue
Service (IRS) and the Fair Labor Board rule that the person was
actually performing the duties of a full-time
worker. This type of misreporting results in adjudication, fines,
and payment of back taxes. This can be
significant for an organization that has a large contingent
workforce.
One way to mitigate the risk or misclassification is for the
organization to hire through a third-party staffing
agency and then treat the contingent workforce differently. The
contingent workforce cannot take part in the
MHR 6901, Compensation Management 3
UNIT x STUDY GUIDE
Title
organization’s reward and recognition programs, for example.
They cannot be treated as a part of the
permanent workforce.
An organization does not need to make contributions to social
security, unemployment insurance, workers’
compensation, and health insurance for contingent workers. The
organization will save the administrative
expenses of withholding various taxes, and not all labor and
employment laws will apply. The worker will be
responsible for his or her own taxes and social security

9. payments.
Using the economics reality test, as explained in your textbook,
can help an organization to determine
whether a worker is an employee or a contingent workforce.
Consequences for not identifying workers
properly are significant for an organization.
Contingent workers provide a valuable service to an
organization in terms of cost control and quality
service. As the world becomes more complex, the challenges to
meet organizational human capital
needs becomes more complex as well.
Learning Activities (Nongraded)
Nongraded Learning Activities are provided to aid students in
their course of study. You do not have to submit
them. If you have questions, contact your instructor for further
guidance and information.
Each chapter of your textbook contains a case study related to
the main theory or concept within the chapter.
Review the case studies to gain a better understanding of the
course materials as they relate to
compensation considerations. Feel free to discuss the chapter
case studies with your classmates in the
Student Break Room forum.