After reading chapter 11, you should be able to: Identify the kinds of decisions involved in establishing a pay structure, summarize legal requirements for pay policies, discuss how economic forces influence decisions about pay, describe how employees evaluate the fairness of a pay structure, explain how organizations design pay structures related to jobs. | FUNDAMENTALS OF HUMAN RESOURCE MANAGEMENT 5TH EDITION BY . NOE, . HOLLENBECK, B. GERHART, AND . WRIGHT CHAPTER 11 ESTABLISHING A PAY STRUCTURE Decisions About Pay Legal Requirements for Pay: Equal Employment Opportunity Employers must not base differences in pay on an employee’s age, sex, race, or other protected status. Any differences in pay must be tied to such business-related considerations as job responsibilities or performance. The goal is for employers to provide equal pay for equal work. Legal Requirements for Pay: Minimum Wage Minimum wage –lowest amount that employers may pay under federal or state law, stated as an amount of pay per hour. Fair Labor Standards Act (FLSA) – federal law that establishes a minimum wage and requirements for overtime pay and child labor. Legal Requirements for Pay: Overtime Pay Overtime rate under FLSA is 1½ times employee’s usual hourly rate, including any bonuses, and piece-rate payments. Exempt employees – managers, outside salespeople, and other employees not covered by FLSA requirement for overtime pay. Nonexempt employees – employees covered by FLSA requirements for overtime pay. . Employee Judgments About Pay Fairness Employees compare their pay and contributions against three yardsticks: What they think employees in other organizations earn for doing the same job. What they think other employees holding different jobs within the organization earn for doing work at the same or different levels. What they think other employees in the organization earn for doing the same job as theirs. Pay Equity If employees conclude that they are under-rewarded, they are likely to make up the difference in one of three ways: They might put forth less effort (reducing their inputs). They might find a way to increase their outcomes (., stealing). They might withdraw (by leaving the organization or refusing to cooperate). Employees’ beliefs about fairness also influence their willingness to accept . | FUNDAMENTALS OF HUMAN RESOURCE MANAGEMENT 5TH EDITION BY . NOE, . HOLLENBECK, B. GERHART, AND . WRIGHT CHAPTER 11 ESTABLISHING A PAY STRUCTURE Decisions About Pay Legal Requirements for Pay: Equal Employment Opportunity Employers must not base differences in pay on an employee’s age, sex, race, or other protected status. Any differences in pay must be tied to such business-related considerations as job responsibilities or performance. The goal is for employers to provide equal pay for equal work. Legal Requirements for Pay: Minimum Wage Minimum wage –lowest amount that employers may pay under federal or state law, stated as an amount of pay per hour. Fair Labor Standards Act (FLSA) – federal law that establishes a minimum wage and requirements for overtime pay and child labor. Legal Requirements for Pay: Overtime Pay Overtime rate under FLSA is 1½ times employee’s usual hourly rate, including any bonuses, and piece-rate payments. Exempt employees – managers,
