Chapter 6 Pay, Benefits, and Working Conditions Understanding Pay, Benefits, and Incentives Work Arrangements and Organizations

Chapter 6Pay, Benefits, and Working Conditions

Understanding Pay, Benefits, and IncentivesWork Arrangements and Organizations

Gross Pay, Deductions, and Net Pay

Gross PayTotal Pay Before DeductionsEquals Hourly Wages + Overtime

Hourly WageBased on 40 Hour Work Week

Overtime> 40 HoursPaid “time and a half”


SalaryRegular hours, but no overtime pay

DeductionsAmounts subtracted from gross pay

Social Security*Federal* and State Income Tax*Medicare*Savings ContributionsHealth Insurance Costs


Net pay“Take-home pay”Equals Gross Pay – Deductions

Estimating Annual SalaryHourly Rate * 2000

$8.00/hour: $8.00 * 2000 = $16,000


Compute Gross PayRegular hours worked: 40Overtime hours worked: 9Regular rate of pay: $7.50

Compute Gross PayRegular hours worked: 45Regular rate of pay: $8.15


Compute Gross PayRegular salary: $854 per monthOvertime rate: $12.54 per hour

12 hours of overtime

Calculate Monthly PayAnnual pay: $27,500


Find State and Federal Withholding Taxes

Single PersonO AllowancesMade $256 Last Week



Married Person2 AllowancesMade $846 Last Month



Married Person4 AllowancesMade $1,560 Last Month

Benefits and Incentives

Benefits – Part of compensation in addition to pay

Profit SharingEmployee receives a portion of company profits“Incentive Pay” Increases productivity

Paid vacationsTypically two weeks per year to start


Paid HolidaysInclude Christmas, Thanksgiving, Labor Day, etc.If you work a holiday, “double time” or more

Employee ServicesExtras such as discounts on merchandise, free parking, day-care, tuition reimbursement, etc.


Sick PayNormally only available to full-time employeesAbout 3 – 10 days per year

Leaves of AbsenceWithout pay, but provides job securityFamily Medical Leave Act (FMLA)

50+ employees, must give 12 weeks off per year for birth of child or illness of self or family memberGuaranteed job when return and healthcare during leave


InsuranceHealth

Usually your company has a set provider such as Blue Cross/Blue ShieldTypically the employer pays for a portion and you pay for a portion

Dental/VisionEmployer chooses provider, share costs

LifeUsed in case of your death to supplement lost incomePay cash to a “beneficiary”


Bonuses and stock optionsAnother form of “incentive pay”Stock options give employees the right to buy a certain number of shares at a set price

Travel ExpensesMay provide company car or reimburse miles driven on personal car“Expense Account”

May be given a set daily allowance or must keep receipts to submit upon return


Pension and savings plansPensions

Provided by employerReceive a monthly check upon retirement“Vested” after a set number of years

Vested means you are entitled to retirement benefits

Employer-sponsored savings plans401(k) and 403(b)

Employee makes contribution to account, employer may match a portionEarnings grow tax-free

GOALSGOALS

Lesson 6.2

Work Arrangements and Organizations

Explain flexible job arrangements, such as flexible schedules, job rotation, job sharing, and permanent part-time employment.

Describe the role of unions and professional organizations in the workplace.

Flexible Work Arrangements

Altered workweeksFlextime

Choose hours: 6-3, 7-4, 8-5, 9-6Core time (most crucial to be there): 10-3May decreases absenteeism

Compressed workweekInstead of 5 days, 8 hours you’d work 4 days 10 hours


Job rotationTrained in more than one jobCan switch/rotate between positionsGreater job satisfaction

Reduces boredom

Helps when employees are absent

Job sharingTwo people share a full-time job


Permanent part-timeMany are choosing to work 16-25 hours per weekSaves employers money, while providing flexibility to workersBalance family/work life

TelecommutingWork from home or on the roadStay in contact with manager via phone, e-mail, internet

Labor Unions and Professional Organizations

Labor UnionsGroup of people in a similar occupation organized to protect rights of workersWorkers pay union dues which support their own lawyers, doctors and public officials


Functions of unionsRecruit new membersEngage in collective bargaining

Negotiating terms of employment contracts – wages, benefits, management rights, etc.

Support political candidates that favor unionsProvide support services for workers


Types of unionsCraft unions

Construction, railroad, printing

Industrial unionsSteel, automobile, industry

Public-employee unionsPolice, teachers, firefighters


Professional organizationsCollect dues to provide the following

Newsletters ConferencesWorkshops

Some professions require membersAmerican Bar Association - lawyers


GrievanceA formal complaint against management for violating a contract

SeniorityRanking of when each employee is hired

StrikeUnion members refuse to work until an agreement is met

LobbyingSupporting a political action or supporting legislation to benefit the profession

Documents

Chapter 6 Pay, Benefits, and Working Conditions Understanding Pay, Benefits, and Incentives Work Arrangements and Organizations