Human Resource Management Study Set 10

Answer:

There are certain legal requirements and set of laws that need to be complied with while setting pay structures for any firm. The following are the set of legal requirements that should be followed by a small startup business.
1) Equal Employment Opportunity - Companies cannot differentiate an employee based on his caste, color, sex or religion. Employees are to be truly differentiated on the basis of their skills and experience.
There has to be an equal opportunity for all at work. This however does not mean that equal pay will be paid to men and women. If the two are doing same work and are same experienced then they should be paid equally. Job evaluation is one of the aspects for measuring the worth of a job and then paying them accordingly.
2) Minimum Wage: As per the Minimum wages act and FLSA (Fair Labor Standards Act), which differs in different countries, an employee should be paid a minimum wage for his services rendered. This amount is calculated hour wise and differs across continents/countries. This depends on the living standards of that country as well as the current that prevails in the economy.
3) Overtime Pay : According to the FLSA (Fair Labor Standards Act) requirements, employees are supposed to be paid extra money for any overtime they do. Some companies follow this while some don't. This differs in employees who are exempt and non-exempt from such requirements.
4) Child Labor: Child labor is strictly prohibited. Any employer cannot employee any child under the age of 14 for any kind of hazardous work.
5) Prevailing wages : Any employer must pay the current prevailing rate of that area to his/her employer. The prevailing rates are decided taking into consideration factors such as standard of living, etc. and must be based on 30% of the local labor force.
When a company is just set up, the scale of its operations is small and it's just in the process of developing things and policies and lot of other aspects are to be taken care of.
For a small startup, it might not be feasible to spend too much on the workforce. But gradually this is expanded when the company gets a hang of its current operations. But in this process, it has to take care of equal employment opportunity, paying minimum wages, paying overtime etc.
In following all these, the company might be left with few resources to be spent elsewhere. Also, it may face some problems with paying overtime to its employees.

Answer:

An organization's pay structure has to be decided very carefully. It is an important factor in attracting employees to join an organization. Organizations should also take enough care to ensure that they don't end up paying more than required as it is a huge cost to the company.
Organizations pay employees more than the market rate when they plan to hire high quality employees. Organizations generally believe that by offering better packages one can hire better people. They believe that incremental value added by these high-quality workers is much more than the cost incurred on them.
Consequences of paying more:
• Hight quality and highly productive employees can be employees
• Employee retention rate increases
• Cost to the company increases
Organizations pay employees less than the market rate when they are in a very poor financial condition and are in a pressure to save costs. They are ready to accept low quality employees by offering less.
Consequences of paying less:
• Organizations would end up recruiting low quality employees
• Employee retention would be very less. Employees leave the company as soon as they get a better package
• Companies might be able to save some costs.

Answer:

Businesses apply various ways to increase their income. They even look for small things through which they can save money for business purpose. They try to get maximum possible profit form the customers also for the same reason. While doing so sometimes they forget that legal and ethical issues should be kept under consideration.
The policy of deducting a share of transaction fees from tips of the servers is legal but not fair. Giving tips to servers is the choice of customers, deducting even a small portion from their tips from restaurant's side is not fair. Though it is true that restaurants are being charged card processing fee, it is the process applicable everywhere. Customers pay tips only when they observe the behavior of the server to be nice. It is server's extra income which should be respected by the restaurant's owners.
Talking about the same in legal terms, it is considered as fair. The restaurants bear high maintenance charges. Deducting small amounts from the tips will save their high processing charges if it is calculated on a monthly basis. The restaurants owners are also right in their prospect that servers are paid fairly and that is why they accept the job offers. The service for which they are paid from the restaurant's side, for the same service they get tips also. So, deducting a small amount in the name of processing fee for cards is legal.