Compensation and Government Regulations

“Compensation and Government Regulations” Please respond to the following:

• Week 9
• Discussion #1

Compare job-based pay with skill-based pay and provide an example of each. Determine which pay you would prefer. Support your decision.

Skill based pay (SBP) is a compensation system that rewards employees additional pay for their formal certification of the employee’s mastery of skills, knowledge, and/orcompetencies whereas job based pay (JBP) is a compensation system that pays employees based on the task theyare assigned to perform. If an employee is working under a SBP system and have received a certification that is relevant to their job, the chances of them earning more money is greater than the chances of a “non-certified” employee. In a JBP system, the salary is commensurate with the responsibilities of the job. Therefore, regardless of how many certifications and degrees the employee has earned, the responsibilities of the job dictates what the pay for will be.

Determine how government regulations affect compensation and if the regulations are needed. Support your position with examples.

• Personally, I would like to work for a company that has a SBP system. This is my preference because in addition to your job knowledge, you would also be compensated based on your formal training, i.e. certifications, degrees, etc. Most people who earn degrees while working for their current employer eventually seek employment elsewhere because they don’t feel that their salary is commensurate with their qualifications and/or degrees/certifications.
• In my currentposition, I believe we are under the JBP system because there is a “salary band” for each position in our company. In this case, once you reach the top of that band, you become maxed out in your salary range. Therefore, if you are looking to make more money, your only options are to try to get a promotion within the company or seek employment elsewhere.

The Department of Labor (DOL) administers and enforces more than 180 federal laws. These mandates and the regulations that implement them cover many workplace activities for about 10 million employers and 125 million workers, www.dol.gov/general/aboutdol/majorlaws. A few of the main Federal laws that affect most private and public employment are the Fair Labor Standards Act (FLSA), Occupational Safety and Health (OSH) Act, and Employee Benefit Security.

The Fair Labor Standards Act is administered by the Wage and Hour Division. They are responsible for settingthe standards for wages and overtime pay, requiring employers to pay covered employees at least the federal minimum wage and overtime pay of one-and-one-half times the regular hourly rate, restricting the number of hours that children under the age of 16 can work, and prohibitingthe types of jobs that children under the age of 18 can work. This department also enforces the labor standards provisions of the Immigration and Nationality Act that apply to aliens authorized to work in the U.S. under certain nonimmigrant visa programs.

The Occupational Safety and Health Act is administered by the Occupational Safety and Health Administration (OSHA). The safety and health conditions in most private industries is regulated by OSHA or OSHA-approved state programs, which also cover public sector employers. Employers covered by this act must comply with the regulations, safety, and health standards as required by OSHA. Employers are also required to provide their employees with work and a workplace that is free from recognized, serious hazards.

The Employee Retirement Income Security Act (ERISA) regulates employers who offer pension and welfare benefits plan to their employees. ERISA is administered by the Employee Benefits Security Administration and they impose a wide range of fiduciary, disclosure and reporting requirements on fiduciaries of pension and welfare benefit plans and on others having dealings with these plans. As mandated by ERISA, certain employers and plan administrators must fund an insurance system to protect certain kinds of retirement benefits, with premiums paid to the federal government’s Pension Benefit Guaranty Corporation.

For the protection of the employee, it is essential to have these rules and regulations in place. For example, if these rules and regulations did not exist, employers could pay their employees less than the hourly minimum wage, if there was no “OSHA” oversight of workplace safety and hazards, employees could be working in environments that are not conducive to good health, and underage children could be forced to work long hours for less pay.

“Compensation Packages” Please respond to the following:

Discussion #2

“Compensation Packages” Please respond to the following:

Examine the common elements of compensation packages. Determine which two elements you believe to be the most motivational to an employee and to you. Support your position.

There are many elements that make up a compensation package. Some of these elements are base salaries, bonuses, benefits and insurance as well as other employee perks. In conjunction with the responsibilities of the job, these elements make job offers more attractive. The base pay is the employee’s regular pay, bonuspay is earned based on employee performance, company’s profit, etc., and health benefits. In addition to some companies contributing to or paying the employee’s insurance premium, they also contribution a percentage to the entire family’s premium.

We all are motivated by different elements of a compensation package. Some people are motivated by the base salary, and others might appreciate the other incentives more, i.e. company perks, flexible work hours, commuting subsidies, etc.

At the time I was hired by my company, naturally I was motivated by the salary but I was even more motivated because not only did they pay my insurance premium at 100%, they also covered my dependents at 100%. Unfortunately because of the economy and increases in insurance premium, even though they still cover me at 100%, I have to pay a very small percentage for my dependents.

Compare team and individual bonuses and incentives. Determine which type of bonuses and incentives you would prefer. Support your position with examples.

Team bonuses are based on the performance and/or productivity of an entire group, are excellent incentives for encouraging employees to increase the quality and productivity of their work, and takes the mystery out ofhow much each employee receives because the pot is divided among the group equally. Individual bonuses are based on the individual’s performance and the amount of the bonus is based on the individual’s performance rating and company profit. Individual bonuses are an added incentive for the employee because they know if they exceed expectations, their efforts will be recognized in their bonus check.

If I had to decide between a group or individual bonus, I would prefer an individual bonus. I would prefer an individual bonus because I know what my work ethics and capabilities are, I know what motivates me to do better, and I know I am self-driven. Whereas, I might not have this same knowledge about my team members because they could be randomly selected and there’s a good chance that I’ve never worked with them directly. Therefore, I wouldn’t be aware of their work ethics, drive, or motivation.