Do employees who perform well receive larger compensation increase, while those who do not perform as well see minimal or no increase in compensation
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Please respond to at least 3 postings from other class mates in a positive manner. Please respond to each post separately using at least 2 references for each post
Author name is Oscar
Compare and Contrast an Entitlement Compensation Philosophy and a Performance Focused Compensation Philosophy
To attract and retain workers that are motivated and competent, healthcare organizations compete with each other aggressively and also other firms within the industry to hire skilled employees. This calls for the human resource departments in healthcare sector recruit competent professionals to earn a competitive advantage. The human resource strategist has to find a balance between the company priorities and competing factors and come up with a compensation system that satisfies the goals and objectives of the employees and organizations.
Entitlement compensation philosophy is common in organizations that have increasing compensation schemes each year. It helps in organizing pay rates. This compensation increases based on time one has spent with the company. Generally, according to entitlement philosophy, all employees including executives who subscribe to it ought to receive pay increase on base pay for spending more than a year working for the company. In addition, benefit programs and incentives should continue growing regardless of the changing economic conditions or industry (Flynn, Mathis, & Jackson, 2016). According to Entitlement Compensation Philosophy, a company should give the same rate of increase and uniform payout bonus for all their workers as well. According to this philosophy as the employee continues to offer his or her service, costs of employer increases, regardless of competition pressure from other organizations or performance of the employee.
On the other and Performance Focused Compensation Philosophy refers to a situation where businesses compensate employees based on the performance level achieved by each employee. Unlike Entitlement Compensation Philosophy not all employees are guaranteed a raise and also do not offer equal increases throughout the firm. Employees who perform satisfactorily obtain pay increase and each employee has his or her different rate of compensation rate (Flynn, Mathis, & Jackson, 2016). Therefore, those employees who have satisfactory performance are considered competent and the labor market compensates them more compared to those with average performance depending on the appraisal method applied (Stevens, 2014). Bonuses are given out based on the group, organization and individual performance results. In facets of compensation practices, only a few organizations are fully performance oriented.
Both entitlement compensation philosophy and performance focused compensation philosophy use direct compensation. These are tangible rewards paid for in working relationship. Health workers are paid a basic pay plus a variable pay. The variable pay is given out in the form of stock options, incentives, and bonuses (Reed &Bogardus, 2015).
In both compensation philosophies, the base pay and incentives vary depending on the task, physical effort, skills and knowledge and working conditions of the job. They both also consider external equity. External equity examines rates that other organizations are paying in a compensation program for a position that is competing in an organization. Due to the shortage of healthcare workers that are skilled having an external equity is considered very important for healthcare workers to compete effectively for employees. According to (Hernandez & O’Connor, 2010), healthcare employers that fail to provide compensation that is viewed as equitable in comparison to other organizations by the employees are more prone to a higher turnover. They will also find it challenging to recruit high demand and qualified individuals
In conclusion, an organization can use both an entitlement compensation philosophy and a performance-focused compensation philosophy. In such a scenario, they will be working in a consortium. However, currently, many healthcare facilities are trying to break up from the entitlement mode of performance oriented. This has been challenging due to the strength of trade unions and historic traditions.
Flynn, W. J., Mathis, R. L., Jackson, J.H., Valentine, S. R. (2016). Healthcare human resource management (3rd ed.). South-Western. Thompson Chapter 12 & 13
Hernandez, S. R., & O’Connor, S. J. (2010). Strategic human resources management in health services organizations. Clifton Park, NY: Delmar Cengage Learning.
Reed, S. M., &Bogardus, A. M. (2015). PHR/SPHR Professional in Human Resources Certification deluxe study guide.
Stevens, R. (2014). The public-private health care state: Essays on the history of American health care policy. New Brunswick: Transaction Publishers.
Author name is Monica
The Fair Labor Standards Act (FLSA) is a federal law, passed in 1938, that affects compensation. It establishes minimum wage, overtime pay, record keeping and youth employment standards affecting employees in the private sector (United States Department of Labor [DOL], 2016). Employees are classified as exempt and nonexempt employees under the FLSA. Exempt employees usually hold executive and administrative positions, and are not paid overtime by employers. Duties of exempt employees include, primarily management duties, decision discretion/judgment and require advanced knowledge/training/education. Nonexempt positions include secretarial, clerical and salaried blue-collar positions and must be paid overtime by employers (Flynn, Jackson, Mathis & Valentine, 2016).
Employers must consider many issues regarding FLSA compliance and should research compliance requirements in the states in which they work. Issues such as overtime and exempt and nonexempt employees may seem confusing to managers and HR professionals. For example, ?comp time? is extra time worked in which employees choose time off instead of payment. However, comp time is prohibited in the private sector. Any time spent in training counts as time worked for nonexempt employees. Travel time also counts as work time if it occurs during working hours and if it is work related. An example of this would be traveling to satellite offices. If an employer requires employees to change into hospital issued scrubs or wear specialized protective equipment, a ?reasonable amount? of time must be allowed to change and is considered work time by some states (Flynn et al., 2016). Since the nursing profession is mainly women, as of 2010, employers must provide a reasonable break and a place for nursing mothers to express milk for one year after the child?s birth (DOL, 2016). These are some of the issues that affect the healthcare workforce and should be considered by administrators/managers.
Healthcare organizations must comply with laws and regulations whether it is federal, state or local. These laws and regulations affect nursing practice (Roussel, Thomas & Harris, 2016). Nurse administrators must understand and abide by these laws and regulations, which may also mandate quality and practice standards. ?Complying with regulatory and professional standards are duties of the nurse administrator at any level in all practice settings.? (American Nurses Association (ANA), 2016, p. 17)
American Nurses Association (2016). Nursing Administration: Scope and Standards of Practice (2nd ed.). Silver Spring, MD: American Nurses Association.
Flynn, W. J., Jackson, J. H., Mathis, R. L., & Valentine, S. R. (2016). Healthcare human resource management (3rd ed.). Boston, MA: Cengage Learning.
Roussel, L., Thomas, P. L., & Harris, J. L. (2016). Management and Leadership for Nurse Administrators (7th ed.). Burlington, MA.: Jones and Bartlett Learning.
United States Department of Labor. (2016). Compliance Assistance-Wages and the Fair Labor Standards Act Overview. Retrieved from https://www.dol.gov/whd/flsa/
Author name is Moises
Entitlement compensation philosophy is followed by many traditional organizations. This philosophy is based on giving an automatic increase in pay for every year of service. Most employees receive the same or nearly the same percentage increase each year. Employees and managers who subscribe to this philosophy believe that individuals who have worked another year, are entitled to a raise in pay. They also believe that all incentives and benefits programs should continue and be increased, regardless of the changing industry and economic conditions. Other ideals of entitlement philosophy include seniority based priority, across-the-board raises, guaranteed movement of scales, industry comparisons, and other expected bonuses (Flynn, 2016).
This is contrary to what a performance focused compensation philosophy is based upon. Performance oriented philosophy states that organizations do not guarantee additional or increased compensation simply for completing another year or organizational service. Instead, pay and incentives reflect performance differences among employees. Employees who perform well receive larger compensation increase, while those who do not perform as well see minimal or no increase in compensation (Flynn, 2016).
The Fair Labor Standards Act (FLSA) is the primary law affecting compensation, which was passed in 1938. Under FLSA, employees are classified as exempt or nonexempt employees, which determines which employees may be paid overtime. In health care organizations, following FLSA law is essential to prevent costly lawsuits. It is important that nursing leaders recognize the importance of this law and how it may affect direct employees that may incur overtime. Penalties for wage and hour violations often include awards of up to two years of back pay for affected current and former employees along with a monetary penalty, which can be costly to health care organizations (Flynn, 2016). Additionally, the Safe Nursing and Patient Care Act was introduced in 2001. The Act?s purpose is to prohibit certain health care employers that receive Medicare payments from requiring nurses to work overtime, and it protects nurses from discrimination if they refuse to work overtime beyond the defined overtime limits. Overtime in this Act is defined as any time worked over a scheduled daily shift, more than 12 hours in a 24-hour period, or more than 80 hours in a consecutive 14-day period. It would impose a $10,000 penalty on employers who willfully violate this Act (Crampton, 2003).
Structuring a compensation plan that attracts, rewards, and retains nurses and others in health organizations is a crucial component in keeping financial integrity within the organization. The cost of nursing turnover eats away at efforts to implement efficient processes and improve health care organizations financial health. Some organizations report an annual RN turnover rate of 40%. Experts estimate that the costs of turnover can climb to 150% (Contino, 2002).
Contino, D. S. (2002). Financial management. how to slash costly turnover. Nursing Management, 10-13.
Crampton, S. M. (2003). The flsa and overtime pay. Public Personnel Management, 331-354.
Flynn, W. J. (2016). Healthcare Human Resource Management. Boston: Cengage Learning.
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