Ba96-M2L3Notes - Chapter 10 Components of Employee...

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Chapter 10 Components of Employee Compensation Tangible o Salary, wages, commissions Slot machines Atlantic City, Las Vegas, Macau Average worker taking home several thousand dollars per quarter o Bonuses o Cash-equivalent benefits Retirement plan, insurance, paid leave, education reimbursement o Non Cash Benefits Company car, wellness programs, access to child care(rare to find in U.S., but found in Silicon Valley to attract employees) Switch jobs because non cash benefits Now transportation allowance instead of company car IRS will deduct car mileage and gasoline tax costs at a standard rate of 45 ¢ /mile if used for company business o Defray cost when it applies to personal business o Now transportation allowance instead of company car o Switch jobs because non cash benefits o Standard rate 45 cents per mile for IRS if company business Intangible o Flexible work schedule Well managed firm, allowance for family leave 50/60 hours per week white collar workday Look for flexible hour plans Hewett Packard: 10 hours a day for 4 days o Pleasant work environment and co-workers Move from small company to Oracle results in 80 hours per week Some industries have obvious environments Ex. I banking: must work Saturday and Sunday although you get paid a lot you pay with it with the number of hours you work 9 in the morning until midnight In world of consulting, all paid the same money per hour, the only difference is the number of hours you work o Advancement opportunity Any mature industry which is down to 2-3 major competitors Ex. car manufacturers, airlines, software companies, banks You want to get into an exploding, growing industry o Location
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Frustrating for recruiters that students don’t know about firm hiring them; they want jobs, don’t care which company CA fastest growing area is Central Valley How do I get on an “Elevator”? Ex. Joining Microsoft in the early 70’s, 80’s, the first employees all became millionaires EECS Major are losing jobs to outsourcing to India because of global economy Programmer in US is overpaid compared to programmer in Malaysia 1 PhD in U.S = 10 in China, they’ll work harder because they are more desperate Insulation: job of carpenter cannot be outsourced Problem for England in the 20 th century was that US beat their quality of life Difficult to place a monetary value on intangible benefits, but they are often critical for long- term career satisfaction. Major Employee Benefits Medical Insurance o Car companies must compete with other countries where health care is provided by the government or is not required like in the U.S. o The cost of health care in the U.S. is on the employer or the employee o Is it far to be compared to these countries? No, but this is a competitive world economy, so it’s done anyway o Going away because of high costs to employers o Most important cost of making a car is health insurance
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