C1 Regulatory Environments for Compensation Programs Questions and Answers

Recognize possible issues and concerns that will drive budget planning

Prepare quarterly and annual reports and their associated statements

Withhold payroll taxes for all elements of compensation

Anticipate future capital needs by determining when the organization will enter the next phase of the business lifecycle

Information on common management processes

The consequences of various disciplinary measures

Individual salary rates of employees in their department

It is a precise estimate of what the future holds for the organization.

It is done primarily by using historical revenue and expense data.

It is done primarily by evaluating market conditions and economic indicators.

It uses internal and external factors to help answer questions about business expectations for the future.

Variable costs decrease

Fixed costs decrease

Variable costs increase and consume a higher percent of revenue

Fixed costs remain the same and consume a lower percent of revenue

Earnings

Shares

Market capitalization

Increased market value and reinvested dividends paid

Assessing how well the business is running

Determining employee satisfaction levels

Measuring the financial success of the business

Evaluating customer perceptions of products or services

Employers must include stock profits in overtime calculations.

Employees must hold options for at least 3 months.

Employees are not required to participate

Stock options may be granted at a 20% discount

The current value of holdings

The current value of holdings and how much it will grow over time at a given rate of return

The desired value in the future and what needs to be invested today to realize that amount

The difference between the desired value in the future and the current value as a percentage of the desired value

A portion of one's salary paid during reserve duty and military leave

A practice of paying a lump sum to employees during a company shutdown

A continuation of an employee's salary after termination

A continuation of a portion of an employee's salary to a beneficiary after the death of an employee

Investors and Finance want to see money spent wisely. Legal must ensure compliance, and HR and operating departments want to see their needs taken into account to attract, retain and motivate a high quality workforce.

Operating departments and HR understand the company must live within its means and Finance cannot allocate funds to a budget if it is likely that profitability will be adversely affected.

Investors want to maximize gains and want to see compensation tightly controlled and Legal needs to ensure that compensation plans do not attract undue scrutiny.

Operating departments view compensation as it applies to them, HR must balance available resources to attract, retain and motivate employees and Finance knows the value of a motivated workforce and will provide the budget necessary to achieve it.

Stock/share options

Stock/share grants

Restricted stock/shares

Performance units   

Defined benefit plan

Death benefits

Defined contribution plan

Vision plan   

General

Cost of living

Automatic

Merit   

Ask them to review or provide feedback, especially on something you have done for them

Talk to the individuals they report to in advance and gain their support so the stakeholders realize upper management already supports your position

Schedule a meeting of all stakeholders and make a strong case that overcomes all of their objections

Explain in precise terms to each stakeholder how your position is the most realistic approach to the issue or concern

Providing a pre-employment medical exam

Creating a new position in the company

Creating a separate area for the disabled employee to work

Job restructuring

When working in more than one department

When working less time than his or her normal schedule

When working in locations other than the corporate office

When working a holiday or weekend   

It is required by the Department of Labor

It is required in determining increase budgets

It determines what information and data sources will be used in the audit

It builds in a process of continuous improvement

There is no promise of a specific benefit at retirement.

Individual accounts must be maintained for each participant.

They are often integrated with government-sponsored programs.

Employees are at risk for financial resources.   

Compiling data needed to calculate salary budgets and merit increases

Identifying trends and key messages emerging over time

Reviewing historical trends to complete annual budgets

Providing quarterly incentive estimates for accruals

The employer maintains a wage disparity between employees who do unequal, but comparable work.

He or she is paid less than employees who are not members of the same protected group.

He or she receives a lower wage than a co-worker of the opposite sex.

City, state and federal government employees

Airline and railroad employees

Employee who work for companies that sell goods in various states

500,000

840,000

8,000,000

9,700,000

Additional quantitative analysis to determine whether pay rates are truly competitive or existing data are unreliable

Qualitative data collection to talk to key stakeholders and employees and determine whether the exit interviews accurately reflect their concerns

Qualitative data collection in the form of an employee survey with questions about employee satisfaction with pay levels

No additional data analysis is needed. Delta should increase pay rates based on the existing data to decrease turnover.