Compensation Management
Explain the job characteristics theory. How does it tie in with intrinsic compensation?
Job characteristics theory was first introduced by Hackman and Oldham. Later on the basis of this theory, a job characteristic model was proposed which is also known as JCM. The theory focuses on five job attributes which helps in motivating the employees and make them feel satisfied at their job. The five job characteristics are as follows:
Task Identity refers to the task assigned at job that has a defined beginning and an end. This enables a worker to have a complete idea about the job procedure and the set criteria for job evaluation.
Autonomy is the level of freedom permitted to the employee at his or her job. It counts whether an employee is allowed to make changes in the schedule of work and its method or he/she is required to take permission from the higher staff for it.
Skills Variety refers to the variety of talents and skills required at the job. It tells whether an employee just has to perform the repetitive tasks or different things.
4- Task Significance means if the job of an employee has any worth in an organization or not. Does the job make substantial impact over the organization or society or it is just an ordinary one.
5- Job Feedback refers to the organizational procedure of letting employees informed about their performance at job regularly. (Hackman & Oldham, 1976, p. 250-279)
The above job characteristics enable an employee to experience meaningfulness of work, responsibility and knowledge of outcomes. The other name of these motivational factors is the intrinsic compensation. Since, only money cannot make an employee happy but they need a motivation at work as well so it is important for any organization to compensate their employees intrinsically too. (Faturochman, 1997, p. 1-13)
2A. Why did Amy classify the shift leaders as Exempt? Are there any advantages to Jones Department Store to having the Shift leaders classified as Exempt?
As according to the U.S. Department of Labor, the shift leaders who can also be classified as the assistant managers are considered as exempt of overtime rights. Since, they supervise their subordinates and also involved in managerial decisions so overtime pay is not applicable on the administrative staff. Moreover, the kind of tasks that Jane performs is not at all repetitive so she cannot claim for the overtime payment as she is exempt for this.
Though there is benefit for the Jones Department Store for classifying shift leaders as exempt since number of employees have already left the job due to extra load so it means Store is going in loss. But here rule is applied as well.
2B. Do you think that the shift leaders are properly classified as exempt? Why or why not?
No, in this case shift leaders are not properly classified as exempt. Since, Jane is neither being paid as equal to the assistant managers nor for the over time. Even she is doing the work of an assistant manager but not paid accordingly. She is involved in all managerial decisions and also part of the management team but actually she is being overburdened more than her job requires.
2C. What are some factors that Amy should consider when determining if shift leaders are Exempt or Nonexempt?
The first thing that Amy should consider is that if the shift leaders are actually being paid equal to the standard rate of assistant managers or not. Secondly, she needs to see if the shift leaders are performing the same set of tasks repeatedly at their job or different. Thirdly, if the shift leaders, who are actually considered as the associates are performing the same tasks that the job requires or being overburdened.
3.What are profit sharing plans? List and describe at least two advantages and disadvantages of profit sharing plans.
Profit Sharing Plans are also known as deferred profit sharing plan according to which employees receive the share in profits earned by the company. These profits are either provided to the employees in form of stocks, bonds or cash. Employees can also opt to receive the profits at the time of retirement or invest in other small businesses. Generally there are three forms of profit sharing plans that are cash plans, deferred plans and third one is the mix of both cash and deferred plans. (Coates, 1991, p.19-25)
These profit sharing plans are formed by the companies to make their employees feel as part of the organization and thus improving the loyalty factor. There are number of advantages of these plans but on the other side there are certain disadvantages as well.
Advantages:
The motivational level among the employees for their work becomes higher.
Employees become more committed to the organization.
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