Reference no: EM132748916

Compensation Issue:

• Governments around the world play varying roles in the workplace. Legislation in any society reflects people's expectations about the role of government, with laws and regulations being the most obvious government intervention. Beyond direct regulation, government affects compensation in other ways. As a major employer, as a consumer of goods and services, and through its fiscal and monetary policies, government affects the supply of and demand for labor.

• In the U.S., legislation has reflected the changing nature of work and the work force. In the 1930s, legislation was concerned with correcting the harsh conditions and arbitrary treatment facing employees. In the 1960s, legislation turned to the issue of equal rights. Laws affecting wages are addressed first; these include the Fair Labor Standards Act of 1938 and prevailing-wage laws.

• Since society continues to wrestle with the issue of discrimination, we examine issues associated with pay discrimination and the significant laws governing this area. Pay discrimination laws - the Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, and the Civil Rights Act of 1991 - require special attention for several reasons.

• First, these laws regulate the design and administration of pay systems. Second, the definition of pay discrimination and the approaches used to defend pay practices are in a state of flux and the issues associated with pay differences for dissimilar jobs. There is also the discussion of the continuing earnings gap between men and women and among racial groups and issues related to the concept of comparable worth.

Problem 1: Consider contemporary practices such as skill-competency-based plans, broad banding, market pricing, and pay-for-performance plans. Evaluate how they may affect the pay discrimination debate.

Problem 2: What activities in managing the pay system are likely candidates to be outsourced? Why?

Problem 3: Respond to the following statement: "Pay grades limit a company's ability to achieve competitive advantage." Do you agree? Provide a rationale for your position.