Implementing On-the-Job Training

The first-year training program for professional staff members of a large national accounting firm consists of classroom seminars and on-the-job training. The ob­jectives of the training arc to ensure that new staff members learn fundamental auditing concepts and procedures and develop technical, analytical, and commu­nications skills that, with further experience and training, will help them achieve their maximum potential with the organization.

Classroom training is used to introduce concepts and theories applicable to the work environment. It consists of three two-day and two three-day seminars presented at varying intervals during the staff member's first year. Although new staff members do receive this special training, actual work experience is the principal method for them to develop many skills necessary to become good auditors.

Most of the firm's audits are performed by teams supervised by the senior member. This individual is responsible for conducting the review and producing the required reports. Teams normally are assembled primarily on the basis of member availability. For this reason, a senior auditor may be assigned one or more first-year employees for a team that must undertake a complex assignment. Because senior auditors are measured on productivity, their attention usually is focused on the work being produced. Therefore, they assign routine tasks to new staff em­ployees, with little or no thought to furthering the career development of these employees. Most senior auditors assume that the next supervisor or the individuals themselves will take care of their training and development needs.

Recently, the firm has lost some capable first-year people. The reason most gave for leaving was that they were not learning or advancing in their profession.

Questions:

1. What, if anything, do you think the company should do to keep its young employees?

2. Do you think that on-the-job training will work in a situation such as the one described?

Exercise 3. Read the following situation and do the task.

McDonald's Training Program

Your class has recently been hired by the president of McDonald's to make rec­ommendations for improving the orientation and training programs of employees in their franchise operations. The key job activities in franchise operations are food preparation, order taking and dealing with customers, and routine clean-up operations. The president wants you to make your recommendations based on your observations as customers.

Your assignment is to design a comprehensive orientation and employee train­ing program for each of the key job activities in franchise operations. Be specific by providing an outline, methods of training, and program evaluation procedures for each activity.

1. Break the class into groups of four to five students per team.

1. Each group is responsible for designing the program for one of the key job activities.

2. Have each team prepare a 10- to 15-minute presentation on its recom­mendations.

SECTION 3. SUPPLEMENTARY READING.

Exercise 1. Read and translate the text.

Training Employees.

Training is a learning process that involves the acquisition of skills, concepts, rules, or attitudes to increase the performance of employees. Generally, the new em­ployee's manager has primary responsibility for job training. Sometimes this train­ing is delegated to a senior employee in the department. Regardless, the quality of this initial training can have a significant influence on the employee's productivity and attitude toward the job. Economic, social, technological, and governmental changes significantly influ­ence the objectives and strategies of all organizations. Changes in these areas can make the skills learned today obsolete in a short time. Also, planned organizational changes and expansions can make it necessary for employees to update their skills or acquire new ones.

Needs Assessment.

Training must be directed toward the accomplishment of some organizational objective, such as more efficient production methods, improved quality of products/ services, or reduced operating costs. This means that an organization should com­mit its resources only to those training activities that can best help in achieving its objectives. Needs assessment is a systematic analysis of the specific training activ­ities required by an organization to achieve its objectives. In general, needs as­sessment can be determined in three ways: organizational analysis, functional-unit or departmental analysis, and individual employee analysis.

At the organizational level, records on absenteeism, turnover, tardiness, and accident rates provide objective evidence of problems within the organization. When problems occur, these records should be examined carefully to determine if the problems could be partially resolved through training.

Employee attitude surveys can also be used to uncover training needs at both the organizational and functional-unit levels. Normally, most organizations bring in an independent party to conduct and analyze the survey.

Consumer or customer surveys can also indicate problem areas that may not be obvious to the employees of an organization. Responses to a customer survey may indicate areas of training for the organization as a whole or within functional units of the organization.

A favorite method used in determining training needs at the organizational, departmental, and individual levels is through the administration of a needs as­sessment questionnaire. Normally, this involves developing a list of skills required to do a particular job effectively and asking employees to check those skills in which they believe they need training. Figure 8-4 shows some typical areas covered by a needs assessment questionnaire.

At the individual level, performance appraisal information is also an excellent source for determining training needs. Regardless of the methods employed, a systematic and accurate needs assessment should be undertaken before any training is conducted.

When clearly denned objectives are lacking, it is impossible to evaluate a program efficiently. Furthermore, there is no basis for selecting appropriate ma­terials, content, or instructional methods

Methods of Training.

Several methods can be used to satisfy an organization's training needs and ac­complish its objectives. Some of the more commonly used methods, however, include on-the-job training, job rotation, apprenticeship training, and classroom training.

On-the-Job Training and Job Rotation.

On-the-job training (OJT) is normally given by a senior employee or manager. The employee is shown how to perform the job and allowed to do it under the trainer's supervision.

One form of on-the-job training is job rotation, sometimes called cross train­ing. In job rotation, an individual learns several different jobs within a work unit or department and performs each for a specified time period. One of the main advantages of job rotation is that it makes flexibility possible in the department. For example, when one member of a work unit is absent, another can perform that job.

The advantages of on-the-job training are that no special facilities are required and the new employee does productive work during the learning process. Its major disadvantage is that the pressures of the workplace can cause instruction of the employee to be haphazard or neglected. In training an employee on the job, several steps can be taken to ensure that the training is effective.

Preparation of the Trainee for Learning the Job. The desire to learn a new job is almost always present in an employee. Showing an interest in the person, explaining the importance of the job, and explaining why it must be done correctly enhance the employee's desire to learn. Determining the employee's previous work experience in similar jobs enables the trainer to use that experience in explaining the present job or to eliminate explanations that are unnecessary.

Breakdown of Work into Components and Identification of Key Points. This breakdown consists of determining the segments that make up the total job. In each segment, something is accomplished to advance the work toward completion. Such a breakdown can be viewed as a detailed road map that guides the employee through the entire work cycle in a rational, easy-to-understand manner, without injury to the person or damage to the equipment. A key point is any directive or information that helps the employee perform a work component correctly, easily, and safely. Key points are the "tricks of the trade" and arc given to the employee to help reduce learning time. Observing and mastering the key points help the employee to acquire needed skills and perform the work more effectively.

Presentation of the Operations and Knowledge. Simply telling an employee how to perform the job is usually not sufficient. An employee not only must be told but also must be shown how to do the job. Each component of the job must be demonstrated. While each is being demonstrated, the key points for that com­ponent should be explained. Employees should be encouraged to ask questions about each component.

Performance Tryout. An employee should perform the job under the guidance of the trainer. Generally, an employee should be required to explain what he or she is going to do at each component of the job. If the explanation is correct, the employee is then allowed to perform the component. If the explanation is incorrect, the mistake should be corrected before the employee is allowed to actually perform the component. Praise and encouragement are essential in this phase.

Follow-Up. When the trainer is reasonably sure that an employee can do the job without monitoring, the employee should be encouraged to work at his or her own pace while developing skills in performing the job and should be left alone. The trainer should return periodically to answer any questions and see that all is going well. Employees should not be turned loose and forgotten. They will have questions and will make better progress if the trainer is around to help with problems and answer questions.

Evaluating Training.

When the results of a training program are evaluated, a number of benefits accrue. Less effective programs can be withdrawn to save time and effort. Weaknesses within established programs can be identified and remedied. Evaluation of training can be broken down into four areas:

1. Reaction - How well did the trainees like the program?

2. Learning - What principles, facts, and concepts were learned in the training program?

3. Behavior - Did the job behavior of the trainees change because of the program?

4. Results - What were the results of the program in terms of factors such as reduced costs or reduction in turnover?

Even when great care is taken in designing evaluation procedures, it is difficult to determine the exact effect of training on learning, behavior, and results. Because of this, the evaluation of training is still limited and often superficial.

Reaction. Reaction evaluation should consider a wide range of topics, including program content, program structure and format, instructional techniques, instructor abilities and style, quality of the learning environment, extent to which training objectives were achieved, and recommendations for improvement. Reaction evaluation questionnaires are normally administered immediately fol­lowing the training, but can be administered several weeks later. The major flaw in using only reaction evaluation is that the enthusiasm of trainees cannot necessarily be taken as evidence of improved ability and performance.

Learning. Learning evaluation is concerned with how well the principles, facts, and skills were understood and absorbed by the trainees. In the teaching of skills, classroom demonstrations by trainees is a fairly objective way to determine how much learning is occurring. Where principles and facts are being taught, paper and pencil tests can be purchased to measure learning in many areas. In other areas, the trainers must develop their own. In order to obtain an accurate picture of what was learned, trainees should be tested both before and after the program.

Behavior. Behavior evaluation, concerned with the nature of the change in the job behavior of the trainee, is much more difficult than reaction and learning evaluation. The following guidelines are offered for evaluating behavioral change:⁵

1. A systematic appraisal should be made of on-the-job performance on a before-and-after basis.

2. The appraisal of performance should be made by one or more of the following groups (the more the better):

   1. The trainee.

   2. The trainee's superior or superiors.

   3. The trainee's subordinates.

   4. The trainee's peers or other people thoroughly familiar with his or her performance.

3. A statistical analysis should be made to compare performance before and after and to relate changes to the training program.

4. The post-training appraisal should be made several months after the train­ing so that the trainees have an opportunity to put into practice what they have learned.

5. A control group (not receiving the training) should be used.

Results. Results evaluation attempts to measure changes in variables such as reduced turn­over, reduced costs, improved efficiency, reduction in grievances, and increases in quantity and quality of production. Pretests, post-tests, and control groups are required, as with behavior evaluation, in performing an accurate results evaluation.

Zap Mail at the Federal Express Company (FEC).

The core business of Federal Express involves the rapid movement of things from one place to another for a fee. In the beginning, FEC promised next-day service. That evolved into the 10:30 a.m. promise. When even that wasn't fast enough for some customers, Zap Mail, a two-hour electronic mail service, was introduced. However, before it was introduced, FEC faced a massive training program because Zap Mail was differ­ent from FEC’s core business. FEC named the training project Gemini. The training budget for Gemini totaled S6 million. Sixty-four full-time trainers were assigned to the project. The training broke down as follows: 175 senior exec­utives received 1,400 hours of instruction, 1,825 middle managers received 14,600 hours, and 22,000 other em­ployees received 92,000 hours.

The College Club at National Semiconductor Corp.

The College Club is a group of previous college hires at National Semiconductor who advise newly relocated graduates about the area, organize social activities for them, and help guide them through the company's College Hire Assimilation Program (CHAP). The College Club convenes frequently to help new employees meet people, sets up monthly trips or outings to acquaint the new hires with the area, and promotes networking. The club even sponsors Thanksgiving and Christmas panics for those who don't go home for the holidays. It also has several events planned throughout the year, includ­ing a peak performance workshop; a day of networking and team building, seminars on technology, human resources, and National’s business, a seminar dealing with leadership and influence; the assignment of a trained advisor to each college hire; and a picnic in the corporate park.

Clinics at Wells Fargo Bank.

Wells Fargo Bank has developed a unique alternative to classroom training - a clinic, which is described as an out-patient alternative to classroom hospitalization. In the clinic, participants work in peer groups to learn and practice new skills. They attend a short, instruc­tional session presented during a staff meeting in their workplace or at a central location. They are taught, coached, and evaluated by a line employee, usually their manager, or a subject-matter expert. (Professional in­structors do not present these clinics.) The typical Wells Fargo clinic is between one and one-half and three hours long. Wells Fargo has found these clinics to be most useful when skill practice is necessary, the need is immediate; the audience has skills or knowledge to expand, build upon, or alter; there are changes in current policies or procedures; and managers are accountable for their em­ployees' learning and results.

Exercise 2. Translate into English.

Каждый сотрудник Career Service в LBS сосредоточился на одним из направлений – финансовые организации, консалтинговые фирмы, промышленные организации и т.д. кроме того, школа вплотную занялась подготовкой студентов к поиску будущей работы. Теперь их учат писать резюме и проводят тренировочные собеседования. Центр карьеры организует в среднем два занятия в день во всех учебных подразделениях школы.

London Business School считается одной из лучших школ в области подготовки финансовых кадров. На протяжении десяти лет она входит в десятку лучших бизнес-школ в мире. Она была образована в 1965 году и до конца 1980-х практически не выделялась на фоне других школ. Но когда сюда пришел Джон Квелч, школа поднялась на принципиально новый уровень и постепенно превратилась в известный брэнд на мировом рынке бизнес-образования.

В последнее время в бизнес-образовательной среде обсуждается модная тема – лидерство и каждая школа пытается найти к ней свой подход. В London Business School лидеров видят нетрадиционно. По их убеждению, настоящий лидер не должен доминировать, его сильной чертой является умение кооперироваться.

Все студенты, поступившие на MBA, проходят несколько курсов по воспитании лидерских навыков. Для начала их вывозят на тренинг, что-то вроде тренинга по образованию команды, где «новобранцам» приходится, например, лазать по стенам без страховки. Во время учебных занятий слушателей разбивают на команды, соблюдая принцип равного количества национальностей, женщин, профессионального опыта и т.д. в таких группах им приходится готовить совместные проекты. На программах для топ менеджеров лидеров воспитывают по-другому. Их помещают в новую обстановку и заставляют размышлять над своими ценностями.

Занятия проходят, например, в Лондонском зоопарке и в музее естественных наук. Слушателей сопровождает эксперт. Он приносит с собой древние инструменты, чтобы наглядно продемонстрировать эволюцию человека. «Для менеджеров это своеобразное открытие, они воспринимают информацию не только на интеллектуальном уровне, но и на эмоциональном», - считает Гай Сондерс.

UNIT 5. WAGES AND SALARIES.

SECTION 1. KEY VOCABULARY.

Exercise 1. Match the words with their corresponding definitions.

pay wages incentive

salary compensation standard of living

to earn base wage remuneration

range base salary performance

job evaluation

1. the way that someone does their job, and how well they do it;

2. the limits within which amounts, qualities etc. can vary;

3. assessment of the specific tasks involved in the various jobs in an organization for the purpose of establishing a scale on which their relative worth may be measured;

4. money that you receive as payment from organization you work for, usually paid to you every month;

5. the money someone receives for the job they do;

6. your salary before extra money such as bonuses and commissions is added to;

7. the amount of wealth or comfort that a person, group or country has;

8. money that someone earns according to the number of hours, days, or weeks that they work, especially money that is paid each week;

9. payment for work, especially in the form of a salary and additional benefits such as car;

10. the amount of money that workers are paid for each normal hour, week, etc. that they work, not including any extra payments;

11. the total amount of money and other advantages that someone receives as an employee;

12. to be paid money for the work you do;

13. something which is used to encourage people to make them to work harder, produce more or spend more money.

Exercise 2. Read and translate the text.

Wages and salaries.

Base wages and salaries are the hourly, weekly, or monthly pay that employees receive in exchange for their work. In most situations, base wages or salaries make up the largest portion of an individual's total compensation. In light of the facts that many organizations do not pay incentives and that many employees discount or take for granted the value of benefits, base wages and salaries are the focus of the compensation system in the eyes of employees.

Base wages and salaries form the foundation for most employees' perceptions as to the fairness or equity of the pay system. If employees do not perceive that they are being fairly paid, there are many possible negative effects (tardiness, absenteeism, turnover, strikes, etc.). There is also some­thing to be said for the fact that the base wage and salary system often reflects the tone or atmosphere of the entire organization. If the base wage and salary system is perceived as being fair and equitable, then the organization is usually viewed in the same light. Of course, the reverse of this is also true. Because of its significance to the entire organization, it is critical that an organization develop and maintain a sound base wage and salary system.

Objective of the Base Wage and Salary System.

The primary objective of any base wage and salary system is to establish a structure and system for the equitable payment of employees, depending on their job and their level of performance in their job. While this objective is straightforward and clear, successfully attaining it is not an easy matter. Table 1 represents some of the basic policy questions that need to be addressed as a first step in establishing a base wage and salary system.

Most base wage and salary systems establish pay ranges for certain jobs, based on the relative worth of the job to the organization. An individual's performance on the job should then determine where that individual's pay falls within the job's range. The key to a sound base wage and salary system is the establishment of different pay ranges for the different jobs within the organization. A pay range for a given job establishes a range of permissible pay, with a minimum and maximum. Establishing pay ranges involves two basic phases: (1) determining the relative worth of the different jobs to the organization (ensuring internal equity) and (2) pricing the different jobs (ensuring external equity). Job evaluation is the primary method used to determine the relative worth of jobs to the organization. Wage surveys represent one of the most commonly used tools for pricing jobs.

Table 1. Specific policy issues in developing and implementing a base wage and salary structure.

1. What is the lowest rate of pay that can be offered for a job that will entice the quality of employees the organization desires to have as its members?

2. What is the rate of pay that must be offered to incumbents to ensure that they remain with the organization?

3. Does the organization desire to recognize seniority and meritorious performance through the base pay schedule?

4. Is it wise or necessary to offer more than one rate of pay to employees performing either identical or similar work?

5. What is considered to be a sufficient difference in base rates of pay among jobs requiring varying levels of knowledge and skills and of responsibilities and duties?

6. Does the organization wish to recognize dangerous and distressing working conditions within the base pay schedule?

7. Should there be a difference in base pay progression opportunities among jobs of varying worth?

8. Do employees have a significant opportunity to higher-level jobs? If so, what should be the relationship between promotion to a higher job and changes in base pay?

9. Will policies and regulations permit incumbents to earn rates of pay higher than established maximums and lower than established minimums? What would be the reasons for allowing such deviations?

10. How will the pay structure accommodate across-the-board cost-of-living, or other adjustments not related to employee tenure, performance, or responsibility and duty changes?

Job Evaluation.

Job evaluation is a systematic determination of the value of each job in relation to other jobs in the organization. This process is used for designing a pay structure, not for appraising the performance of individuals holding the jobs. The general idea of job evaluation is to enumerate the requirements of a job and the job's contribution to the organization and then to classify it according to importance. For instance, a design engineer's job would involve more complex requirements and a potentially greater contribution to an organization than that of an assembler of the designed product. Although both jobs are important, a determination must be made concerning the relative worth of each. While the overriding purpose of job evaluation is to establish the relative worth of jobs, it can serve several other purposes.

The first step in a job evaluation program is to gather information on the jobs being evaluated. Normally, information is obtained from current job descriptions. If current job descriptions do not exist, then it is usually necessary to analyze the jobs and create up-to-date descriptions.

The job evaluation process then identifies the factor or factors that are to be used in determining the worth of different jobs to the organization. Some fre­quently used factors are skill, responsibility, and working conditions.

The job evaluation process also involves developing and implementing a plan that uses the chosen factors for evaluating the relative worth of the different jobs to the organization. Such a plan should consistently place jobs requiring more of the factors at a higher level in the job hierarchy than jobs requiring fewer of the factors. Most job evaluation plans are variations or combinations of four basic methods: point, factor comparison, job classification, and job ranking.

Exercise 3. Give the definitions to the words in italics.

1. It is clearly in the organization’s best interests to design an effective compensation system.

2. The managing director’s personal assistant earned £35,000 last year.

3. Greyhound proposed a package of incentive-based pay raises.

4. New business have created higher-paying jobs, lifting tens of millions of Chinese to a far higher standard of living.

5. Compensation is the financial remuneration given by the organization to its employees in exchange for their work.

6. Workers were demanding a 10% wage increase.

7. This is my first increase in salary.

8. All I want is a full day’s work for a full day’s pay.

9. The key to a sound base wage and salary system is the establishment of different pay ranges for different jobs within the organization.

10. The last step in most performance appraisal system is giving feedback to subordinates about their performance.

11. The general idea of job evaluation is to enumerate the requirements of a job and the job’s contribution to the organization and then to classify it according to importance.

Exercise 4. Complete the passage using the following words and phases:

to pay, wage, labor, policy, performance, wage structure, compensation system, the level of unemployment, high-quality employees.

A good 1... ... can help attract qualified applicants, retain present employees, and stimulate high 2... at a cost that is reasonable for one’s industry and geographic area. To set up a successful system, decisions must be made about wage levels, 3... ..., and the individual 4... determination system.

The wage-level decision is a management 5... decision about whether the firm wants 6... above, at, or below the going rate for 7... in the industry or the geographic area. Most firms choose to pay near the average. Those that cannot afford more pay below average. Large, successful firms may like to cultivate the image of being «wage leaders» by internationally paying more than average and thus attracting and keeping 8... ... . IBM, for example, pays top dollar to get the new employees it want. 9... ... in the labor force also affects wage levels. Pay declines when labor is plentiful (high unemployment) and increases when labor is scarce (low unemployment).

Exercise 5. Match the words and phrases with their corresponding definitions.

1. to earn a living

2. to take a drop in salary

3. top salary earners

4. wage differentials

5. to receive

6. structure

7. remuneration

8. wage packet

1. to get

2. to accept a lower salary

3. payment for work

4. people with high salaries

5. to be paid enough money to live

6. the difference between high wages and low wages

7. income, often contained in an envelope

8. the way in which the parts of a system are arranged or organized

Exercise 6. Complete the sentences using the phrases (1-8) from Exercise 5. Change the form of the words where necessary.

1. He ... ... in salary in order to help the firm.

2. Members of Parliament ... a 4,2% pay increase this year.

3. They demanded adequate ... for their work.

4. For skilled and unskilled workers ... ... have increased.

5. You can’t expect to ... ... from your painting.

6. Once you take out rent, food and bills from your ... ... you are not left with much.

7. With such an old-fashioned management …, it’s not surprising they’re having problems.

8. ... ... ... will in future face a much heftier tax bill.

Exercise 7. Translate into English.

A. 1. Она зарабатывает на жизнь, работая официанткой в ресторане.

2. Он согласился на понижение заработной платы, чтобы не потерять работу.

3. Всего несколько человек в нашей фирме получают очень высокую зарплату.

4. разница в зарплате у руководителей компании и рядовых служащих составляет десятки тысяч долларов.

5. Он получает ежемесячное жалование.

6. Прежде всего, вам необходимо описать организационную структуру компании.

7. Автор статьи отказался от каких бы то ни было денег.

8. Он получил компенсацию за неиспользованный отпуск.

B. 1. Плата – это денежное возмещение или вознаграждение за что-либо.

2. Оклад – преобладающая форма заработной платы. В силу традиции работники, получавшие жалование ежемесячно, зачастую на банковский счет, не имели права на оплату сверхурочных.

3. Таким образом получали оплату в основном так называемые «белые воротнички» в отличие от «синих воротничков» - работников, которым заработная плата выплачивалась в виде наличных.

4. Заработная плата – платежи за работу, выполненную наемным рабочим.

5. Заработная плата и оклад ранее различались. Заработная плата выплачивалась наличными еженедельно, в то время как оклад переводился ежемесячно на банковский счет.

6. Компенсация – это возмещение потерь, понесенных убытков, расходов, возврат долга.

7. Компенсационные выплаты представляют денежное возмещение неиспользованного отпуска, затрат на переезд в другой город или регион ит.д.

8. Стимулы, в качестве поощрений за хорошие результаты, могут включать повышенную оплату, улучшение условий труда и перспективу продвижения по службе или просто повышение престижа.

9. Стимулы могут применяться в связи с реальными результатами, например в связи с увеличением выпуска продукции, либо в связи с оценкой руководителями таких форм трудового вклада, как присутствие на работе и соблюдение трудовой дисциплины.

10. Уровень жизни – экономическая составляющая благосостояния людей, которая измеряется величиной потребления на душу населения.

11. Уровень жизни – это совокупность условий жизни населения страны, соответствующих достигнутому уровню ее экономического развития.

12. Денежное вознаграждение – это денежная оплата труда работников в виде заработной платы и премиальных.

SECTION 2.SKILLS FOCUS.

Exercise 1. Read the following text and answer the questions.

Fair Pay for Pecan Workers.

The Cloverdale Pecan Company is one of the country's largest processors of pecans. Located in a medium-sized southern town, it employs approximately 1,350 people. Although Cloverdale does own a few pecan orchards, the great majority of the nuts it processes are bought on the open market. The processing involves grading the nuts for both size and quality, shelling, packaging, and shipping them to customers. Most buyers are candy manufacturers.

Cloverdale, which was started 19 years ago by the family of company president Jackson Massie, has been continually expanding since its inception. As do most growing companies, Cloverdale has always paid whatever was necessary to fill a vacancy without having a formal wage and salary system. Jackson Massie suspected that some wage inequities had developed over the years. His speculation was supported by complaints about such inequities from several good, long-term em­ployees. Therefore, Jackson hired a group of respected consultants to do a complete wage and salary study of all the nonexempt jobs in the company.

The study, which took five months to complete, confirmed Jackson's suspicion. Wages of several jobs were found to van' from the norm. Furthermore, the situation was complicated by several factors. First, many of the employees earning too much were being paid according to union wage scales. Cloverdale is not unionized, but most of its competitors are. Second, many of those m underpaid jobs were being paid at rates equal to similar positions in other companies in Cloverdale's geo­graphic area. Third, because of a tight labor market, many new employees had been hired at the top of the range for their respective grades. The study also revealed that the nature of many jobs had changed so much that they needed to be completely reclassified.

Questions:

1. What should Cloverdale do to correct the existing wage inequities?

2. How could the company have prevented these problems?

3. If it is recommended that some jobs be placed in a lower pay grade, how might Cloverdale implement these adjustments?

Exercise 2. Read the following text and answer the questions.

A Dead-End Street?

Early in December, Roger Tomlin was called in for his annual salary review. Roger was a staff engineer for the Zee Engineering Company, which he had been with for just over 10 years. In the past, Roger had usually received what he considered to be a fair pay raise. During this salary review, his manager Ben Jackson informed Roger that he was recommending a 10 percent raise. Ben went on to extol the fine job Roger had done in the past year and to explain that Roger should be especially proud of the above-average pay raise he would be getting. Upon reflec­tion, Roger was rather proud; in 10 years, he had been promoted twice, and his annual salary- had gone from $23,000 to 538,000.

Things were moving along just fine for Roger until he discovered a few weeks later that a new engineer right out of college had just been hired by Zee at a starting salary of 535,000. It really upset Roger to think that a new, unproven engineer would be starting at a salary almost equal to his.

Roger's first move was to talk to several of his colleagues. Most of Roger's fellow employees were aware of the situation and they didn't like it either. Luke Johnson, who had been an engineer with Zee for over 12 years, asked Roger if he realized that he was probably making less money, in actual dollars, than when he started at Zee. This really floored Roger. Roger realized that inflation had eaten into everyone's paycheck, but he had never even considered the possibility that he had not kept up with inflation. That evening, on the way home from work, Roger stopped by the local library and looked up the consumer price index (CPI) for the past 10 years. According to Roger's figures, if his pay had kept up exactly with inflation, he would be making $38,500!

After a very restless night, the first thing Roger did upon arriving at work the next day was go straight to personnel manager Joe Dixon's office. After presenting his case about the new employee and about how inflation had eroded his pay, Roger sat back and waited for Dixon's reply.

Joe started out by explaining that he understood just how Roger felt. At the same time, however, Joe stated that Roger had to consider the situation from the company's standpoint. The current supply and demand situation dictated that Zee had to pay 535,000 to get new engineers who were any good at all. Roger explained that he could understand that, but what he couldn't understand was why the company couldn't pay him and other senior engineers more money. Joe again sympathized with Roger but then went on to explain that it was a supply and demand situation. The fact of the matter was that senior engineers just didn't demand that much more pay than engineers just starting!

Questions

1. Do you think Roger is being fairly paid?

2. It you were Roger, how would you react to Joe's explanation?

3. Do you think a wage survey might help in this situation?

SECTION 3. SUPPLEMENTARY READING.

Exercise 1. Read and translate the text.

Pricing the Job.

The factor comparison method of evaluation is the only technique that relates the worth of jobs to a monetary scale; even then, the results are derived primarily from the wage scale that the organization currently uses. In general, job evaluation cannot be used to set the wage rate; however, it provides the basis for this determination. To ensure that external factors such as labor market conditions, prevailing wage rates and living costs are recognized in the wage scale, information about these factors must be gathered.

Wage and Salary Surveys.

Wage and salary surveys are used to collect comparative information on the policies, practices, and methods of wage payment from selected organizations in a given geographic location or particular type of industry. Recent data show that more than 90 percent of the large corporations in the United States take part in wage and salary surveys or use them in their compensation systems. In addition to providing knowledge of the market and ensuring external equity, wage surveys can correct employee misconceptions about certain jobs, and they can also have a positive impact on employee motivation.

Data for a wage survey may be gathered from a variety of sources. The Bureau of Labor Statistics of the U.S. Department of Labor regularly publishes wage data broken down by geographic area, industry, and occupation. Industry and employee associations sometimes conduct surveys and publish their results. Trade magazines also may contain wage survey information.

In addition to using these sources, many organizations design and conduct their own surveys. To design a wage survey, the jobs, organizations, and area to be studied must be determined, as must the method for gathering data. If the wage survey is done in conjunction with either the point or factor comparison method of job evaluation, the key jobs selected for these methods are normally the ones that are surveyed. When using the classification or ranking method, the same guidelines followed for selecting jobs with the point and factor comparison methods should be applied in choosing the jobs to be surveyed.

A geographic area, an industry type, or a combination of the two may be surveyed. The size of the geographic area, the cost-of-living index for the area, and similar factors must be considered when defining the scope of the survey. The organizations to be surveyed are normally competitors or companies that employ similar types of employees. When they are willing to cooperate, it is often desirable to survey the most important and most respected organizations in the area. The three basic methods of surveying wage data are personal interviews, tel­ephone interviews, and mailed questionnaires. The most reliable and most expen­sive method is the personal interview. Mailed questionnaires are probably used most frequently. However, questionnaires should only be used to survey jobs that have a uniform meaning throughout the industry. If there is any doubt concerning the definition of a job, the responses to a questionnaire may be unreliable. Another potential problem with mailed questionnaires is that they can be answered by someone who is not thoroughly familiar with the wage structure. The telephone method, which is quick but often yields incomplete information, may be used to clarify responses to mailed questionnaires.

Base Wage Variability in the Pork Packing industry.

The United Food & Commercial Workers' Union rep­resents about 31,000 workers in pork packing. The recession of the early 1980s forced many union locals to negotiate agreements that were separate from the national union. As a result, base wages in the pork packing industry have been declining steadily in recent years to about 40 percent below the 1980 wage of $10.69 per hour, and they differ widely from company to company. Since wage costs make up 50 percent of meatpackers' operating costs, differences in wage rates are a key competitive clement between companies. Wage rates are also critical since net margins in the industry are expected to remain below an anemic 1 percent.

1985 Figures from the United Food & Commercial Workers' Union showed that the 2,900 workers at Hormel were the highest paid in the industry at $9.00, the 2,500 workers at nonunion Armour were among the lowest paid at $6.00 per hour. Swift & Company work­ers were in the middle with a base wage of $8.75 per hour.

Periodic Salary Surveys.

Many organizations regularly conduct salary or wage surveys to remain informed. The Public Relations Journal (PRJ) periodically polls its readers and reports its findings in a subsequent issue of the journal. PRJ's questionnaire and analysis typically investigate the relation­ships between salary and numerous other variables such as age, sex, job level, time in job, time with organization, and time in the public relations field. These findings give PRJ's readers, many of whom are managers, some hard data to use for comparative purposes.

Exercise 2. Translate into English.

Учет труда и заработной платы занимает одно из центральных мест во всей системе учета на предприятии. Заработная плата является основным источником доходов работников фирмы. Трудовые доходы работника определяются его личным вкладом с учетом конечных итогов деятельности предприятия. Минимальный размер оплаты труда устанавливается федеральным законодательством для всех предприятий на территории РФ и не может быть ниже размера прожиточного минимума трудоспособного человека.

Определение заработной платы – это выраженная в денежной форме часть национального дохода, распределяемая по количеству и качеству труда, затраченного каждым работником. Зарплата поступает в личное потребление работника и является вознаграждением за труд.

Номинальная заработная плата – заработная плата в денежном выражении, которая выплачивается работнику в соответствии с количеством и качеством затраченного им труда за определенный период времени. Номинальная заработная плата характеризует уровень зарплаты вне связи с ценами на товары и услуги.

Реальная заработная плата – это зарплата, выраженная в материальных благах и услугах, которые можно приобрести за номинальную заработную плату. Реальная зарплата зависит от величины номинальной и цен на приобретаемые товары и услуги. При повышении номинальной заработной платы на 15% и инфляции за этот период на 10% реальная заработная плата увеличится только на 5%.

При оплате труда учитывается насколько основных принципов. Во-первых, это принцип справедливости – равная оплата за равный труд. Во-вторых, сложность выполняемой работы и уровень квалификации труда. В-третьих, необходимо учитывать вредные условия труда и тяжелого физического труда. В-четвертых, с одной стороны, это стимулирование за качество труда и добросовестное отношение к труду. А с другой стороны, материальное наказание за допущенный брак и безответное отношение к своим обязанностям. И, наконец, индексация заработной платы в соответствии с темпами инфляции.

UNIT 6. BENEFITS.

SECTION 1. KEY VOCABULARY.

Exercise1.Match the words with their corresponding definitions.

to negotiate sick leave Social Security

to contribute pension plan disability benefits

benefits life insurance employee benefits

dependant(dependent) health insurance unemployment benefits

a. something, especially money that an employer gives to workers in addition to their normal pay, to encourage them to work harder;

b. things that are offered to the employees of the company in addition to their normal pay, such as company cars, loans at low rates of interest, and the possibility of buying shares;

c. time with pay that you are allowed to be absent from work because you are ill;

d. money provided by the government to people who needed extra help or cannot work because they cannot use part of their body properly;

e. money paid regularly by the government to people who do not have a job;

f. a system by which an employer, insurance company etc. provides workers with a pension after they have made regular payments to them over many years;

g. a system of insurance run by US government, into which workers make regular payments, and which provides money when they are unable to work, especially because they are old;

h. insurance that will pay for someone’s medical treatment if they are ill or injured, often taken out by employers for people who work for them, especially in the USA;

i. insurance that pays out an amount when someone dies or when someone reaches a particular age, dies before they reach that age;

j. someone who depends on you for money, food, clothes etc.;

k. to discuss something in order to reach an agreement;

l. to give money, help, ideas etc. to something that a lot of other people are involved in.

Exercise 2. Read and translate the text.

Employee benefits, sometimes called fringe benefits, are those rewards that or­ganizations provide to employees for being members of the organization. Unlike wages, salaries, and incentives, benefits are usually not related to employee per­formance. Figures compiled by the U.S. Chamber of Commerce show that pay­ments by organisations for employee benefits in 1987 averaged slightly over $10,700 per year per employee.' These same figures indicated that benefit payments varied widely among the reporting companies, ranging from under $3,500 to more than $13,000 per year per employee. The average of slightly over $10,700 represents approximately 39 percent of total compensation received by the average employee. A recent survey conducted by Hewitt Associates reported that over 50 percent expect benefits to increase in the 1990s as a percentage of total compensation. Only 9 percent of this group expect benefits to decrease as a percentage of total compensation.

The War Labor Board coined the term fringe benefits over 40 years ago. Reasoning that employer-provided benefits such as paid vacations, holidays, and pensions were "on the fringe of wages," the agency exempted them from pay controls. It has been argued that this action, more than any single event, led to the dramatic expansion of employee benefits that has since occurred. However, because of the significance of benefits to total compensation, many employers for fear that it has a minimising effect have dropped the world fringe.

The average company spends an amount equal to over one third of its cash payroll on employee benefits. Thus, an average individual who is paid $18,000 per year would get about $6,588 more per year in benefits. Benefits come in several forms, including pay for time not worked, insurance benefits, retirement benefits, and employee services. Pay for time not worked includes sick leave, vacation, holidays, and unemployment compensation. Insurance benefits often include life and health insurance for employees and their dependents. Some organisations pay the entire cost of insurance, others share the cost with employees, and still others negotiate group rates but let employees pay the full cost. Workers' compensation is a legally required insurance benefit that provides medical care and disability income for employees injured on the job. Social Security is a government pension plan to which both employers and employees contribute. Many employers also provide a private pension plan to which they and their employees contribute. Employee service benefits include such things as credit unions, tuition reimbursement, and recreational opportunities.

A good benefits plan may help encourage people to join and stay with an organisation, but it seldom stimulates high performance because benefits are tied to mere membership in the organisation rather than to performance. To get a good return on their benefit dollars, companies should shop carefully, avoid redundant coverage, and provide only those benefits that their employees want. Benefit programs should also be explained to employees in plain English so that they can use the benefits appropriately and appreciate what the company is providing.

Some organisations have instituted "cafeteria benefit plans," whereby some basic coverage is provided for all employees but employees are then allowed to choose which additional benefits they want (up to a cost limit based on salary). An employee with five children might choose medical and dental coverage for dependents; a single employee might prefer more vacation time; and an older employee might elect increased pension benefits. Such a flexible system would be expected to encourage people to stay in the organisation and perhaps to help the company attract new employees.

Exercise 3. Give the definitions to the words in italics.

1. Most companies are experimenting with new kinds of employees benefits in order to attract and retain qualified workers.

2. The company offers an excellent salary and benefits package, including relocation costs.

3. Werner never used a day of sick leave during his first 10 years as a firefighter.

4. How long have you been receiving unemployment benefit?

5. Congress has changed the laws governing private pension plans.

6. I need your name, age, and Social Security number.

7. These measures would protect people with health problems from losing their health insurance if they change jobs.

8. Life insurers will pay a total of $ 20 billion in AIDS death claims under individual life insurance by the year 2005.

9. An employee with five children might choose medical and dental coverage for dependents.

10. Union leaders have negotiated an agreement for a shorter working week.

11. His department contributed £ 2,3 million towards the fund.

Exercise 4. Complete the passages using the following words and phases:

to receive, benefits, vacation, dependents, compensation, life insurance, health insurance, social security, state employment office.

A. Flexible plans must offer a choice between only taxable and statutory nontaxable benefits. Taxable 1... allowed include cash, group term life insurance in excess of $50,000, and group term life insurance for 2... . Statutory nontaxable benefits include group term 3... ... , group legal services, accident and 4... ... , dependent care assistance, and certain types of deferred compensation . 5... days are also treated as nontaxable benefits.

B. To 6... unemployment 7... , an individual must submit an application through the 8... ... ... and must meet three eligibility requirements. The individual must: (1) have been covered by 9... ... for a minimum number of weeks; (2) have been laid off (in some states, discharged employees may qualify); and (3) be willing to accept any employment offered through the state unemployment compensation commission.

Exercise 5. Match the words and phrases with their corresponding definitions.

1. disability

2. dependant

3. to contribute

4. to negotiate

5. to draw pension

6. membership

7. to take out a year’s membership

8. survey

1. the state of belonging to an organization

2. examination of opinions

3. to receive pension

4. to pay to become a member for one year

5. to give money

6. the state of lacking some physical ability

7. to discuss

8. a person who is financially supported by you

Exercise 6. Complete the sentences using the phrases (1-8) from Exercise 5. Change the form of the words where necessary.

1. I am ... for a new contract at the moment.

2. I have... ... ... membership.

3. She is deaf, but refuses to let her ... prevent her from doing what she wants to do.

4. Between all of us at work, we’re hoping to ... £100 m. towards the new wing of the hospital.

5. Jack has four ... .

6. He won’t be able to ... his ... until he’s 65.

7. A recent ... found that 58% of people did not know where their heart is.

8. You have to apply for ... of the sport club.

Exercise 7. Translate into English.

1. 1. Он получает пенсию по нетрудоспособности, т.к. он инвалид труда.

2. Иждивенец – это неработоспособный человек, которого обеспечивают средствами к существованию.

3. Эта организация ежегодно жертвует в фонд Красного Креста.

4. Если сможете, пожертвуйте продукты питания и одежду в помощь беженцам.

5. Необходимо провести переговоры с противником об условиях мира.

6. Почему вы не получили пенсию за ноябрь?

7. По мнению большинства членов профсоюза необходимо провести сидячую забастовку.

8. Он прибрел право быть членом этой организации в течение двух лет.

9. Докладчик в общих чертах описал положение в мире.

10. Вы должны сделать обзор современной литературы.

B. 1. Страхование на случай болезни может распространяться лишь на отдельных лиц или на их иждивенцев. Системы страхования на случай болезни могут быть обязательными или добровольными.

2. Страхование жизни – это контракт, обеспечивающий средства в случае смерти или при достижении определенного возраста. Полисы страхования жизни могут быть «без прибыли», т.е. на установленную сумму денег, или «с прибылью».

3. В случае страхования жизни с выплатой прибыли по страховому полису выплачиваемая сумма отражает прибыли, которые страховая компания смогла получить в результате инвестирования взносов.

4. Пособие по безработице – это денежные выплаты безработным. Страны различаются по уровню таких платежей.

5. В одних странах это может быть фиксированный уровень. В других странах уровень платежей может зависеть от прежней зарплаты безработных и от продолжительности времени, в течение которого предоставляются пособия.

6. Социальное обеспечение – система обеспечения и обслуживания престарелых и нетрудоспособных граждан, а также семей, в которых есть дети.

7. Система социального обеспечения обычно включает пенсии, пособия работающим, пособия по безработице, пособия малообеспеченным семьям в которых есть дети и т.д.

8. Иждивенец – это человек, который получает постоянную материальную помощь от другого человека.

9. Привилегии для служащих иногда также называют дополнительные льготы. Работодатели обеспечивают служащих дополнительными льготами по разным причинам.

10. Это может быть желание улучшить здоровье и психологическое состояние работников или стремление сформировать у сотрудников чувство преданности фирме.

11. Привилегия – это исключительное право, преимущество, предоставленное кому-либо.

12. Страховое пособие в связи с утратой нетрудоспособности выплачивается людям, утратившим трудоспособность, полностью или частично, вследствие ранения, увечий или болезни.

SECTION 2. SKILLS FOCUS.

Exercise 1. Read the following information and do the task.

The ideal job.

A recent survey posed the problem of people’s attitudes and considerations when looking for a job. They placed some of their requirements for a rewarding and satisfying job in order of importance. Here are most of elements considered:

• a good salary

• good relationships with colleagues

• a good canteen or cafeteria

• variety and enjoyment in the work done

• contact with public

• little work to do

• the opportunity to reduce other people’s suffering

• flexible hours

• long holidays

• proximity to place of residence

• travel

• social activities at one’s place of work (dinner dances, excursions, picnics)

• promotion prospects

• a pleasant and attractive place of work

• a clean and well-heated place of work

• the prestige of the company

• any members of the opposite sex working there should be attractive

• perks (company car, cheap loans, large discounts on company products)

• a feeling of making the world a better place to live in

• a smoke-free work area

• a crèche / daycare centre for children

• opportunities for continuing education

• an opportunity to initiate new products

• close supervision over you

• little or no supervision over you

• a strong union

• a tight organizational structure with well-defined hierarchy

• loose organizational structure

• a democratic decision-making process

• lots of responsibility

• job security

• a feeling of being useful

• the opportunity to command people

• a convenient place to park

• access to the out of doors

TASK. Classify each of the elements of the ideal job under the following four headings: essential, unimportant, desirable, undesirable. Give your reasons.

Exercise 2. Read the text and do the task.

Who is Eligible for Retirement Benefits?

Preston Jones, 51, had been an hourly worked in the machine shop of the Armon Company for 21 years and 4 months. On a Christmas holiday, he suffered a severe heart attack and was hospitalized for three weeks. At his release, his doctor said he was to rest at home for a couple of months. After his recuperation period, his doctor, along with Armon Company’s physicians, was to decide whether or not Preston should be retired for disability reasons. They never got the opportunity to make this decision - in February, Preston died of a second heart attack.

He left a wife, four sons, two daughters, and two daughters-in-law. Mrs. Jones still had four children at home.

As a part of Preston's estate, his wife received the normal group insurance payments, the balance in his savings plan account, and the other benefits due her. However, she did not receive a pension from Armon as a survivor of an eligible employee.

When Mrs. Jones and the company representatives had discussed the settle­ment, she had inquired about her husband's pension and about her right to receive it. The personnel department had stated that since contributions to this fund were made only by the company, no survivor's benefits were provided.

Questions:

1. What do you think Mrs. Jones should do at this point? Give your reasons.

Exercise 3. read the text and do the task.

Fringe Benefits for Professionals.

LJT, Architect, a small architectural firm organized as a sole proprietorship, serves clients in the New York metropolitan area. Anticipating a good year, Len Elmore, the principal, hopes for a gross of between $300,000 and $400,000.

In an architectural practice, revenue is produced by providing a variety of services that range from creating a design and generating the construction docu­ments used by a contractor in executing the project to visiting the site periodically to verify that construction is progressing according to specifications. Architects are also responsible for coordinating their work with that of the engineers and other consultants associated with projects.

Many small architectural firms such as LJT, Architect, have no permanent employees. Workers are hired for a particular project with the understanding that they might remain after a particular phase of the project is completed but that they might be laid off. Employees are usually needed for the function of design, de­velopment, and production of construction documents, which includes approxi­mately 50 to 70 percent of the services provided under a standard architectural agreement.

The personnel needed for these projects are acquired in several ways. They can be hired on a full-time permanent or temporary basis or on a part-time basis to moonlight (that is, as a second job). An employee might also be borrowed from another firm whose contracted work has been completed with no new work foreseen immediately. Len feels that hiring full-time temporary or permanent employees gives him more control over the production aspect of his practice.

At this time, Len does not follow any formal personnel policies. He prefers to "work things out" as issues and problems arise. When hiring, he will agree verbally to certain broad terms of employment, compensation, and benefits common to local professional offices, such as two weeks' vacation per year. He usually insists on a two-week to one-month probationary period during which the salary paid is slightly less than normal. A spot check of some of his colleagues leads him to believe that his salary rates are comparable with those of similar employers. Because the nature of the employment tends to be temporary, Len suggests a contract arrangement with his employees, in which no taxes are withheld and no government-required benefits are provided.

Len's plans for expansion include adding employees until his staff numbers 10. For him, this is the best staff size to provide high-quality professional services. However, the employment situation is easing for workers in architectural firms; more newspaper ads seek applicants and fewer callers contact Len for jobs. Those coming for interviews ask more than "When do I start?" Many ask about vacations, sick leave, paid holidays, medical insurance, and profit-sharing plans. Others want to know about the possibilities of advancement with LJT, Architect, and about such long-range benefits as pensions and education leave.

In view of the situation, Len has decided to look into the possibility of pro­viding his employees with a fringe benefit package. At the same time, however, he fears that his practice may be too small to begin providing these benefits, which may prove to be extremely expensive. He has set aside money from his own earnings to provide these extras for himself and has difficulty in understanding why his employees cannot do the same.

Questions:

1. What recommendations would you make to Len?

2. How much do you think your recommendations would cost?

Exercise 4. Read the following information and do the task.

Taking a Raise.

Assume that you are currently employed as a human resource specialist for a medium-sized company. You have been in your job for a little over two years, and your current salary is $28,000 per year. Two months ago, your company announced that it was going to implement a flexible benefits plan in conjunction with this year's salary raises. Your annual salary review was held last week, and you were informed that your raise would be equivalent to $3,000. For your salary level, the following options are available:

1. Take the entire raise as a monthly salary increase.

2. Take as much of the $3,000 as desired in the form of vacation at the equivalent of $200 per day.

3. Have as much as desired of the $3,000 put into a tax-sheltered retirement plan.

4. Purchase additional term life insurance at the cost of $250 per $100,000 of face value.

5. Purchase dental insurance at the cost of $20 per month for yourself and $10 per month for each dependent.

The company currently provides full health insurance at no cost to employees. How would you elect to take your raise? Be prepared to share your answer with the class.

SECTION 3. SUPPLEMENTARY READING.

Exercise 1. Read and translate the text.

Social security. Social security is a federally administered insurance system. Under current federal laws, both employer and employee must pay into the system, and a certain percentage of the employee's salary is paid up to a maximum limit. Social security costs have changed over the past several years and how they are forecast to change through 1991. With few exceptions, social security is mandatory for employees and employers. The most noteworthy exceptions are state and local government employees. For these employees to become exempt, a majority must vote to do so, and another retirement system must be substituted. Self-employed persons are required to contribute to social security at a rate higher than that paid by a normal employee, but less than the combined percentage paid by both employer and employee. The payments distributed under social security can be grouped into three major cate­gories: retirement benefits, disability benefits, and health insurance.

Disability Benefits. Pensions may be granted under social security to eligible employees who have a disability that is expected to last at least 12 months or to result in death. To be eligible, a person must have worked in a job covered by social security for at least 5 out of the 10 years before becoming disabled. These pensions are calculated with basically the same methods used for calculating retirement benefits.

Health Insurance. Health insurance under social security, commonly known as Medicare, provides partial hospital and medical reimbursement for persons over 65. Hospital insurance, which is known as Part A, is financed through the regular social security funds. Most hospital expenses and certain outpatient, post hospital, and home nursing expenses are covered by Part A of Medicare. The medical insurance, known as Part B, helps a participant pay for a number of different medical procedures and supplies that are completely separate from hospital care. For example, normal outpatient visits and check-ups would fall under Part B. Participation in the medical insurance program (Part B) of Medicare is voluntary and requires the payment of a monthly fee by those wishing to receive coverage. This fee was $31.90 per month in 1989.

Problems Facing Social Security. Almost everyone is aware of the financial crisis faced by social security, stemming from major demographic changes that have taken place since the system was es­tablished. The basic problem is that fewer and fewer people are and will be working to support more and more retirees as the "baby boom" generation reaches retire­ment age. The sharp increases in payments forecasted to fund social security reflect these demographic changes.

Exercise 2. Translate into English.

Система льгот и пособий – это система выплаты пособий в денежной или натуральной форме, посредством которой жители страны получают доход и обслуживание, достаточные для поддержания минимального уровня благосостояния. Система должна поддерживать тех, кто не в состоянии обеспечить себя самостоятельно с помощью работы по причине слишком пожилого или юного возраста, инвалидности, болезни или просто неспособности либо нежелания найти работу. Такая система неизбежно оказывается дорогостоящей и предполагает необходимость выбора. Этот выбор может быть между пособиями в денежной форме и пособиями в натуральной форме; между универсальными пособиями и пособиями по бедности, выдаваемые по результатам проверки нуждаемости. Кроме того, это также может быть выбор между безусловными пособиями и пособиями, обусловленными работой или учебой, и, наконец, между пособиями, положенными по праву, и пособиями, выдаваемыми по усмотрению чиновников.

Пособия в натуральной форме – это обеспечение за государственный счет товарами и услугами тех, кто в них нуждается. Этот метод оказания помощи противопоставляется методу выплаты гражданам денежных пособий, достаточных для удовлетворения их потребностей через рынок. Правительству, стремящемуся обеспечить гражданам страны удовлетворение их основных потребностей, включая потребности в питании, жилье, образовании и медицинском обслуживании, приходится выбирать один из двух методов.

В поддержку выделения денежных пособий приводится довод на основе экономической теории благосостояния. Согласно этой теории люди различаются по своим вкусам и потребностям. Поэтому любые имеющиеся в наличии ресурсы будут более эффективно использоваться, если люди смогут выбирать товары и услуги самостоятельно.

Однако существует немало различных доводов и в пользу пособий в натуральной форме. Когда речь идет о медицинском обслуживании, образовании и жилье, задачи оценки и удовлетворения потребностей тесно связаны между собой. Предполагается, что от улучшения жилищных условий, системы здравоохранения и образования выигрывают не только конкретные потребители этих благ, но и общество в целом. Однако вполне возможно, получив деньги, достаточные для оплаты услуг, необходимых им самим или детям, люди в действительности предпочтут частично или полностью потратить их на привычные вещи.

UNIT 7. PENSION PLANS.

SECTION 1. KEY VOCABULARY.

Exercise 1. Match the words with their corresponding definitions.

to retire pension plan

pension pension rights

vesting private pension (personal pension)

retirement contributory pension plan

contribution non-contributory pension plan

1. a pension plan into which the employee and the employer both make payments;

2. a system by which an employer, insurance company etc. provides workers with a pension after they have made regular payments to them over many years;

3. an amount of money paid regularly by a government, company or financial institution to someone who is officially considered to be too old or too ill to earn money by working;

4. a pension that someone arranges for themselves with an insurance company, or that is arranged for them by a broker;

5. to stop work at the end of your working life;

6. the act of leaving a job because you have reached the end of your working life, or the period of your life after you do this;

7. the right that someone has to receive a pension from a company from the government, especially when they stop work at a particular age;

8. the right of a worker to receive a pension from the company they work for;

9. a regular payment made to the government by an employee and their employer so that the employee has the right to receive money from the government when they are ill or unemployed;

10. a pension plan into which only the employer makes payments, not the employee.

Exercise 2. Read and translate the text.

Pension Plans and Pension Rights.

Pension and retirement plans, which provides a source of income to people who have retired, represent money paid for past services. Private pension plans can be funded entirely by the organization or jointly by the organization and the employee during the time of employment. Plans requiring employee contributions are called contributory plans; those that do not are called non-contributory plans. Funded pension plans are financed by money that has been set aside previously for that specific purpose. Nonfunded plans make payments to recipients out of current specific purpose. The most prevalent form of pension plan in the U.S. industry is the defined benefit plan. Under a defined benefit plan, the employer pledges to provide a benefit determined by a definite formula at the employee’s retirement date. The other major type of retirement plan is the defined contribution plan, which calls for a fixed or known annual contribution instead of a known benefit.

An inherent promise of security in some form exists in every pension plan. However, if the pension benefits are too low or the plan is seriously underfunded, this promise of security is breached, and employees who have spent most of their working lives with companies that have pension plans do not receive an adequate - or any, in some cases - pension.

Another problem involves the vested rights of employees. Vesting refers to the rights of individuals to receive, if they should leave the organization prior to retirement, the dollars paid into a pension or retirement fund by their employer. For example, a vested employee can receive, at some later date, the funds invested by the employer. If not vested, the employee cannot receive the fund paid by the employer. A frequent approach is deferred full vesting, in which an employee, on meeting certain age and service requirements, enjoys full vested rights. A similar approach, called deferred graded vesting, gradually gives the employee an increasing percentage of benefits until the age and service requirements for full vesting are met.

Vesting requirements historically have caused problems for both employees and employers. In many old plans, the employee who was terminated or quit before retirement age did not receive any pension benefits regardless of the number of years worked under the pension plan or how close retirement was. Even under plans that did provide vesting rights, the requirements were strict in terms of length of service. Requirements for vesting are often made stringent by employers in an effort to keep employees from leaving the organization, at least until their rights have become fully vested. On the other hand, employers have experienced the problem of employees quitting after they have been vested in the pension plan in order to draw out the funds credited to them. To counteract this, employers have incorporated provisions in their pension plans stating that funds other than those contributed by the employee will not be distributed until the employee reaches a certain age, even if he or she has left the organization.

Reretirement Planning.

A benefit that has recently evolved is pre-retirement planning. The purpose of such planning program is to help employees prepare for retirement, both financially and psychologically. At the most basic level, pre-retirement planning provides employees with information about the financial benefits they will receive upon retirement. Social security, pensions, employee stock ownership, and health and life insurance coverage are usually discussed. Other programs go beyond financial planning and into such topics as housing, relocation, health, nutrition, sleep, exercise, part-time work, second careers, community service, recreation, and continuing education.

The rapid pace of change in today's world accentuated by volatile inflation rates and uncertainty concerning social security has enhanced the need for some type of pre-retirement planning. This need is not expected to be diminished in the near future.

Exercise 3. Give the definitions to the words in italics.

1. Pension and retirement plans represent money paid for past services.

2. If you retire at 55 you can expect your pension to be half the size it would be at age 65.

3. The law changed in 1998 to allow individuals to opt out of their company plans and start a personal pension.

4. In this country, women can retire at 60 and men at 65.

5. Mr. Baker is 65 next month, the usual retirement age for Air Products officers.

6. Britain is required to equalize pension rights between men and women.

7. Pension plans are moving towards quicker vesting for employees of five years’ service or more.

8. To qualify for the full basic pension, someone would need to have paid National Insurance contributions for most of their working life.

Exercise 4. Complete the passage using the following words and phases:

service, benefits, employees, work force, pension plan, average earnings, retirement benefits, private pension plan, hourly paid employees.

The 1987 survey reported by the U. S. Chamber of Commerce found that over 85 percent of the participants had 1... ... . This can be compared with the fact that less than one-sixth of the nonagricultural 2... .. was covered by 3... ... ... prior to 1948. Ninety-one percent of the pension plans reported in the 1986 Hay/Huggins Benefits Comparison were defined benefits plans and 8 percent were defined contribution plans.

Defined benefits plans make up overwhelming majority of pension plans and have a specified formula for calculating 4... . The most popular approach has been the final-average pay plan, in which the 5... ... is based on average earnings in the years, generally two or five, immediately preceding retirement. The actual benefit sum is then computed as a function of the person’s calculated 6... ... and years of 7... . In another common approach, the flat-benefit plan, all participants who meet the eligibility requirements receive a fixed benefit regardless of their earning.

Plans affecting salaried employees usually use the final-average plan. Plans limited to 8... ... ... traditionally used the flat-benefit plan. Where the hourly and salaried 9... are both affected, a final-average pay formula may be modified to provide a minimum dollar benefit for participants in the lower pay classifications.

Exercise 5. Match the words and phrases with their corresponding definitions.

1. to fund

2. recipient

3. fund

4. income

5. income support

6. to quit

7. to invest

8. rights

1. to leave a job

2. the freedom and advantages that everyone should be allowed to have

3. money that is earned from doing work or received from investments

4. a sum of money saved, collected or provided for a particular purpose

5. a person who receives something

6. to put money into something to make a profit

7. to pay for

8. money that is paid by the government to people who have no income or very low income

Exercise 6. Complete the sentences using the phrases (1-8) from Exercise 5. Change the form of the words where necessary.

1. New legislation is gradually taking away worker’s ... .

2. Many single mothers are on ... ... .

3. The company has agreed to ... my trip to Australia.

4. This latest cut in government spending will affect income support ... and their families.

5. Would you ... your job if you inherited lots of money?

6. The institute will ... 5 million in the project.

7. In the U. K., the pension ... assets account for 70 % of personal sector saving.

8. Average ... have risen by 4.5% over the past year.

Exercise 7. Translate into English.

A. 1. Эта организация финансирует строительство нового развлекательного центра.

2. Он получает пособие по безработице.

3. Он при деньгах, т.к. он получил наследство.

4. Часть получаемой прибыли идет в фонд заработной платы.

5. Его месячный доход составляет $1500.

6. Он живет не по средствам.

7. Он ушел со службы.

8. Ему сообщили о том, что он уволен.

9. Он вложил все свои деньги в это предприятие.

10. У всех есть право на труд и на отдых.

11. Вы должны отстаивать свои права.

B. 1. Пенсия – это регулярное денежное пособие, выплачиваемое государством лицам после достижения пенсионного возраста.

2. Пенсия – регулярные денежные выплаты, предоставляемые государством при достижении определенного возраста, наступлении инвалидности, в случае потери кормильца, а также за выслугу лет и особые заслуги перед государством.

3. Права на получение пенсий – одна из главных форм личного благосостояния в современном обществе.

4. Значение прав на получение пенсий имеет отношение к страховой стоимости ожидаемых пенсионных поступлений, обусловленных возрастом и другими индивидуальными особенностями пенсионеров.

5. Основанная на взносах пенсионная программа – программа пенсионного обеспечения, участники которой должны делать взносы в пенсионный фонд.

6. Это, как правило, происходит в форме регулярных перечислений определенного процента заработной платы.

7. При пенсионной программе, на предусматривающей взносов участников, все затраты ложатся на плечи руководителя.

8. Пенсионная программа без предварительных взносов – пенсионная программа, в соответствии с которой от участников не требуется делать взносы, соответствующие величине их пенсий, если взносы полностью осуществляются их работодателями.

9.Пенсионную программу без предварительных взносов следует отличать от пенсионной программы за счет взносов работника и предпринимателей, когда от участников требуются взносы, соответствующие части величины их пенсий.

10. Отставка – это окончательный уход с военной или гражданской государственной службы.

SECTION 2.SKILLS FOCUS.

Exercise 1. Read the following text and do the task.

My name’s Luigi and I’m a hotel manager in Venice. I get paid a salary every month. In summer we’re very busy, so we work a lot of extra hours, or overtime; the money for this is quite good. Working in a hotel, we also get nice perks, for example free meals!

I’m Ivan and I work as a waiter in Prague. I like my job even if I don’t earn very much: I get paid wages every week by the restaurant. We get the minimum wage: the lowest amount allowed by law. But we also get tips, money that customers leave for us in addition to the bill. Some tourists are very generous.

I’m Catherine and I’m a saleswoman based in Paris. I get a basic salary, plus commission: a percentage on everything I sell. If I sell more than a particular amount in a year, I also get extra money – a bonus, which is nice. There are some good fringe benefits with this job: I get a company car, and they make payments for my pension, money that I’ll get regularly after I stop working. All that makes a good benefits package.

Task 1. Xavier and Yvonne are talking about Xavier’s new job as a photocopier salesman. Complete the conversation.

1. X: I get paid every month.

Y: I see. You get a …, not wages.

2. X: I usually have to work late: I don’t get paid for it, but I get a percentage for every photocopier I sell.

Y: So you don’ t get …, but you do get … . That’s good.

3. X: The people in production get a … if they reach their targets.

Y: Oh right. They get an extra payment for producing a certain amount.

4. X: The company pays for medical treatment too, and the company restaurant is fantastic.

Y: Wow! The … … sound very nice.

5. X: And they’ve given me a … … to go and visit clients.

Y: So you don’t have to buy a new car.

6. X: What’s more, the company pays in money for us to get when we don’t work any more.

Y: Yes, it’s important to get a good … .

7. X: The total … … is brilliant.

Y: Yes, all that extra stuff is really worth having.

Task 2. Discuss your jobs.

Exercise 2. Read the following information and answer the questions.

Edwina Kennedy, 68, retired bank manager answers the question ‘What is your community’s greatest problem?’ “Oh, that’s an easy one. Loneliness, plain and simple. This is a big city and if you don’t have a family or are retired, you’ve got no one to talk to. The elderly seem to be invisible to most people. Mrs. Phelps, who lives across the hall from me, hasn’t got anyone. Her son lives miles away and never comes to see her. All she’s got is her cat. I don’t know, I’ve heard of some cities setting up senior citizens’ groups. You know, they take them on excursions and the like.”

Task. Discuss the following questions.

1. What part can the elderly play in the family/community?

2. What can be gained from a grandparent/grandchild relationship? Are there any negative factors?

Exercise 3. Read the following information and answer the questions.

Age discrimination has long been a fact of corporate life in the U.S. Wall Street’s emphasis on “youthful, dynamic management” and the actuarial cost of an older staff have shortened many an executive’s career. For some companies, firing or forcing early retirement on highly paid older executives has two perceived advantages: It cuts salary costs and pension liabilities and, at the same time, makes room at the top for young achievers. It is a particularly tempting option in a recessionary period like the present, when corporations seek to trim expenses.

But these days it is also a potentially costly option. Executives have begun to fight back by invoking the protections of the 1967 Age Discrimination in Employment Act (ADEA). Among the companies that have recently lost suits under that act are Sandia Laboratories (a subsidiary of Western Electric), in Albuquerque; Eastern Air Lines, in Miami; Chemetron, in Chicago; Atlantic Container Lines, in New York City; and Textron, in Providence.

Other companies have settled out of court. Standard Oil Co. of California paid $2 million to 264 employees in a 1974 age bias case. Pan American World Airways Inc. settled $900,000 on some 600 older management employees in 1978. Hartford Fire Insurance Co. (now Hartford Insurance Company), a subsidiary of International Telephone & Telegraph Corp., paid $240,000 last year to 72 current or former employees allegedly fired, demoted, or denied promotions in violation of ADEA. And Connecticut General Insurance Corp. of Bloomfield, Conn., has quietly settled a number of individual age bias claims, with others pending.

Questions:

1. Which is more important, the energy of a youthful employee or the wisdom and experience of an older one? Which is more expensive?

2. What chance does an older executive have if his company decides he should be discharged? What can he do to prepare for such an event? What kind of compromise can be reached between the older executive and his company?

3. What is the attitude of people in Russia towards older members of society, both in general and in business? Do businesses consider them a liability or an asset, and why?

SECTION 3. SUPPLEMENTARY READING.

Exercise 1. Read and translate the text.

The Retirement Equity Act.

In an effort to ensure the fair treatment of employees under pension plans. Congress in 1974 passed the Employee Retirement Income Security Act (ERISA). This law was designed to ensure the solvency of pension plans by restricting the types of investments that could be made with the plan's funds and providing general guidelines for fund management. Table 1 summarizes the major provisions of ERISA.

Table 1. Major provisions of ERISA

Subject Provisions

Eligibility Prohibited plans from establishing eligibility requirements of more than one year of service, or an age greater than 25, whichever is later.

Vesting Established new minimum standards; employer has three choices:

a. 100 percent vesting after 10 years of service.

b. 25 percent vesting after 5 years of service, grading up to 100 percent after 15 years.

c. 50 percent vesting when age and service (if the employee has at least 5

years of service) equal 45, grading up to 100 percent vesting 5 years later.

Funding Required the employer to fund annually the full cost for current benefit accruals

and amortize past-service benefit liabilities over 30 years for new plans and 40

years for existing plans.

Plan termination insurance Established a government Insurance fund to insure vested pension benefits up

to the lesser of $750 a month or 100 percent of the employee's average wages

during highest paid five years of employment; the employer pays an annual

premium of $1 per participant and is liable for any insurance benefits paid up to 30 percent of the company’s net worth.

Fiduciary responsibility Established the «prudent man» rule as the basic standard of fiduciary

responsibility; prohibits various transactions between fiduciaries and parties-in

-interest; prohibits investment of more than 10 percent of pension plan assets

in the employer's securities.

Portability Permitted an employee leaving a company to make a tax-free transfer of the

assets behind his vested pension benefits (if the employer agrees) or of his

vested profit-sharing or savings plan funds to an individual retirement account.

Individual retirement accounts (IRAs) Provided a vehicle for transfers as noted above and permits employees

of private or public employers that do not have qualified retirement plans to

deduct 15 percent of compensation, up to $1,500, each year for contributions

to a personal retirement fund. Earnings on the fund are not taxable until

distributed.

Reporting and disclosure Required the employer to provide employees with a comprehensive booklet

describing plan provisions and to report annually to the Secretary of Labor on

various operating and financial details of the plan.

Lump-sum distributions Changed the tax rules to provide capital gains treatment on pre-1974 amounts

and to tax post-1973 amounts as ordinary Income, but as the employee's

only income and spread over 10 years.

Limits on contributions and benefits Limited benefits payable from defined-benefit pension plans to the lesser

of

$75.000 a year or 100 percent of average annual cash compensation during

the employee's three highest paid years of service. Limited annual additions

to employee profit-sharing accounts to the lesser of $25,000

or 25 percent of the employee's compensation that year.

The act has been criticized as being too costly. In fact, it has been reported that several companies dropped their pension plans rather than complies with ERISA. Another major complaint has been that it causes an unwieldy amount of paperwork. In 1984, Congress passed the Retirement Equity Act. The overall impact of this act was to liberalize the eligibility requirements, vesting provisions

maternity/paternity leaves, and spouse survivor benefits of retirement plans. Table 2 summarizes the majority provisions of the Retirement Equity Act.

Table 2. Major provisions of the Retirement Equity Act.

• Employees must be allowed to participate in a qualified plan no later than age 21 with one year at service (previously, it was age 25 with one year of service).

• Vesting credit must be awarded for years of service beginning at age 18 (previously, service before age 22 could be ignored in most plans).

• For both vesting and participation purposes, as many as 501 hours of service must be awarded to any employee on maternity or paternity leave.

• An election to war/e spouse survivor benefits must be made in writing by both the participant and spouse and witnessed by a plan representative or notary public.

Mandatory Retirement. The 1978 amendment to the Age Discrimination in Employment Act (ADEA) forbade mandatory retirement before age 70 for companies employing 20 or more people in the private sector and at any age for federal employees. Prior to the effective date of this amendment, January 1, 1979, employers could choose any age for mandatory retirement. An amendment to ADEA that took effect in January 1987 eliminated mandatory retirement at any age for employees of companies with 20 or more employees.

Early Retirement. As an alternative to mandatory retirement, some organizations offer incentives to encourage early retirement. This method of reducing the work force is often viewed as a humanitarian way of reducing the payroll and rewarding long-tenured em­ployees. The types of incentives offered vary, but usually include a lump-sum payment plus the extension of other benefits, such as medical insurance. A 1986 survey by Hewitt Associates found that among their sample of 529 corporations, one-third had used early retirement incentive within the previous five years.

Most pension plans have special allowances for voluntary early retirement. Usually an employee's pension is reduced by a stated amount for every month that he or she retires before age 65. Popular early retirement ages are 55, 60, and 62. Most plans require that an individual must have worked a minimum number of years with the organization to be eligible for early retirement. Early retirement has grown in popularity, partially because of the pension benefits available. Presently, the earliest that an employee can receive social security retirement benefits (reduced) is at age 62.

Employees Not Covered by Pension Plans.

In 1981, legislation was enacted to allow employees to set up individual plans oiled individual retirement accounts (IRAs). Although the basic purpose of IRAs was to provide an option for employees not covered by private pension plans, anyone who has an earned income can invest in an IRA. With an IRA, an individual could originally make tax-exempt contributions to a maximum of S2,000 per year. In conjunction with a spouse-homemaker, a married person could contribute up to $2,250 per year. The 1986 Tax Reform Act drastically decreased the tax advantages of an IRA. Currently, IRA contributions are totally deductible only if he individual's income is less than $25,000 (singles) or $40,000 (married filing jointly) or if the employee is not covered by a company pension plan. Interest earned on IRA accounts is still deferrable. A similar plan, called a Keogh plan, has been effected for self-employed persons. Under a Keogh plan, self-employed persons can currently make tax-exempt annual contributions of up to $30,000 or 25 percent of net self-employment income, whichever was less.

Exercise 2. Translate into English.

С 1 января 2002 года в нашей стране начата пенсионная реформа. Размер и порядок начисления трудовых пенсий регулируются Федеральным законом от 17.12.2001 г. «О трудовых пенсиях в РФ».

Пенсия состоит из трех частей – базовой, страховой и накопительной. Размер базовой пенсии устанавливает государство в зависимости от вида пенсии. Страховая часть пенсии формируется в рамках системы государственного пенсионного страхования, ядром которой является Пенсионный фонд РФ. Источником финансирования страховой части является платеж, собираемый налоговыми органами и перечисляемый в бюджет пенсионного фонда. Накопительная часть формируется за счет страховых взносов, уплачиваемых работодателем в ПФР в составе единого социального налога в пользу своих работников.

Законом предусмотрена индексация пенсий. При этом базовая и страховая части индексируются разными темпами: базовая часть с учетом темпов роста инфляции, а страховая часть в зависимости от темпов роста заработной платы.

Начиная с 2005 года, по решению Правительства РФ, накопительная часть трудовой пенсии формируется только у граждан 1967 года и моложе. Таким образом, для старшей возрастной категории (старше 1967 года рождения) единственный способ повышения размеров будущей пенсии – это самостоятельно или с помощью работодателя начать формировать дополнительную пенсию в негосударственном пенсионном фонде.

Главной особенностью накопительной части трудовой пенсии является возможность работника самостоятельно распорядиться ее формированием. Свои пенсионные накопления можно либо оставить в государственном пенсионном фонде, куда они перечисляются по умолчанию, либо перевести их негосударственный пенсионный фонд. Сделать это можно раз в году.

6,2 миллиона человек заключили договоры с различными негосударственными пенсионными фондами, то есть 15% трудоспособного населения страны. Из них 4 миллиона – по инициативе работодателя, то есть юридических лиц. 760 тысяч россиян уже получают негосударственную пенсию.

Госдума приняла в окончательном чтении законы о добровольных пенсионных накоплениях граждан. Речь идет о пополнении их из трех источников – государственной казны, средств работодателя и самого гражданина. Новый закон не сулит золотые горы, но обещает прибавку гражданам, вступившим в программу софинансирования пенсий.

Основа законопроекта проста. Вкладываешь в накопительную часть своей пенсии тысячу рублей – государство добавляет столько же, но не больше 12 тысяч рублей в год. Что касается людей, которые уже достигли пенсионного возраста, но работать продолжают, то на каждую их тысячу из бюджета выделяют 4 тысячи. Но за год не больше 48 тысяч рублей.

UNIT 8. LINE AND FUNCTIONAL ORGANIZATION.

SECTION 1. KEY VOCABULARY.

Exercise 1.Match the words with their corresponding definitions.

expert red tape to report back

superior flexibility to delegate

authority delegation to carry out

subordinate management

1. someone who has a lower position and less authority than someone else in an organization;

2. someone with a higher position or rank than another person, especially in a job;

3. the power that a person or organization has because of their official or legal position;

4. an ability to change or be changed easily to suit any new situation;

5. official rules that seem complicated and unnecessary and prevent things from being done quickly and easily;

6. someone who has a special skill or special knowledge of an area of work or study, usually as a result of many years experience;

7. the activity or skill of directing and controlling the work of a company or organization;

8. the process of giving part of your power or work to someone in a lower position than you;

9. to give a particular job, duty, right, etc. to someone else so that they do it for you;

10. to find out about something as part of your job, and then to tell your employer about it;

11. to perform or to complete a job or activity.

Exercise 2. Read and translate the text.

Line and functional organization.

Business activity of every kind requires organization to ensure successful progress. A generally accepted understanding of «organization» is the combination of planning, and defining of, delegation responsibilities in each of the various manage­ment functions with the consequential relationships carefully set out and agreed.

The theory of organization assumes that management will use the various methods of organization, viz. «line», «func­tional», «Line and staff», where appropriate with the aim of establishing the most suitable method for the respective circumstances of the business.

Line Organization. This would be appropriate for a business operated within a very clear separate department with the person in charge of each department having complete authority - subordinates in each department being responsible only to one superior. Each departmental head would thus have the same standing and in general equal remuneration, none having specific authority over another.

GENERAL MANAGER

TRANSPORT MARKETING ACCOUNTANT SECRETARY

MANAGER MANAGER

Drivers Maintenance Reps. Clerks Cashier Clerks Registar Clerks

Research

The relevant disadvantages and benefits of line organization can be summarized simply. Disadvantages. Communications between departments are not made easy as everything must, presumably, pass through the respective departmental heads, and thus a degree of «red tape» is caused. Benefits. There is a clear definition of responsibilities and precise duties which, of course, is absolutely essential to maintain efficiency with control and, consequently, discipline is easier to maintain.

Functional Organization. In normal conditions only small firms with limited activity would use line organization and the alternative of functional organization is preferable in larger concerns requiring a greater degree of flexibility. The principle of this type of organization is that functional or specialist work which is common to every department must be in the hands of such specialists who carry out that function or work for all depart­ments. A simple example of this is the now common-place central typing pool. The relevant disadvantages and benefits of this type of organization can be summarized in simple terms. Disadvantages. A danger to discipline because instructions from different sources could conflict unintentionally. Benefits. The «specialists» become experts and are able to pass on their knowledge and experience to subordinates and col­leagues.

GENERAL MANAGER

TRANSPORT MARKETING ACCOUNTANT SECRETARY

MANAGER MANAGER

Drivers Maintenance Reps. Clerks Cashier Clerks Admin.

Typists Typists Services

etc. etc.

Some companies, recognizing the respective benefits of both line and functional organization, operate these under the «line and staff» system.

Whatever system is used, there is a fundamental necessity for all concerned to realize that the principal purposes of organization charts are to establish lines of authority, re­sponsibility, delegation, and communications.

In the efficient operation of any kind of business activity, delegation must be the essential factor in good management. It must, however, always be a «two way traffic» system. Whilst it is good and sound practice to delegate responsibility down or along the line, there must always remain the necessity of reporting up or back to the authority which delegated. In this way ultimate authority and responsibility is preserved. To delegate only without providing for any reporting back is the worst possible kind of management and could be described as foolhardy in the extreme.

The authority delegating must also ensure that the work being delegated is well within the capacity and ability of those to whom it is delegated.

Exercise 3. Give the definitions to the words in italics.

1. Superiors are regularly evaluated by their subordinates.

2. Superiors sometimes find it difficult to delegate their authority.

3. I wouldn’t have taken the job unless I had the authority to run the division.

4. The advantage of this system is flexibility.

5. The only way to get this project off the ground is to cut through the red tape.

6. One of the functions of the marketing expert in commerce is to develop a clear idea of the target market.

7. In banking as in every other business, good management is essential.

8. Mr. Horton set out to establish a structure with maximum controls and maximum of delegation responsibility.

9. Authority to make financial decision has been delegated to a special committee.

10. She reported back to management with bold restructuring proposals.

11. The hospital is carrying out tests to find out what’s wrong with her.

Exercise 4. Complete the passage using the following words and phases:

to hire, position, manager, hierarchy, authority, expertise, departments, line managers, staff positions.

A line position is a 1... in the direct chain of command that is responsible for the achievement of an organization’s goals. A staff position is intended to provide 2... , advice, and support for line positions. The president and the vice presidents for production, finance, and marketing are considered 3... ... - they occupy a position in the direct chain of command and contribute directly to the firm’s goals. The assistant to the president and the assistant to the vice president of production hold professional 4... ... - they assist the individual 5... in a variety of activities. The legal adviser and the vice presidents of research and development (R&D) and human resources are also called professional staff, because they have special skills and because they work with many 6... rather than with just one individual. The Vice president of human resources, for example, would work with all of the other job managers 7... and train employees for their units.

The most obvious difference between line and stuff is purpose. The purpose of line is to work directly towards organizational goals, whereas staff advise and assists. But other distinctions exist as well. One very important difference is 8... . Line authority is generally thought of as the formal or legitimate authority created by the organizational 9... . Staff authority is less concrete and may take a variety of forms.

Exercise 5. Match the words and phrases with their corresponding definitions.

1. to be an expert in something

2. to ensure

3. to be a person in authority

4. to have specialist skills

5. organization

6. to report back to someone

7. to be in charge

8. department

1. to be the person responsible

2. to have skills in a particular subject

3. to bring information to someone

4. to be an important or high ranking person

5. one of the parts of a large organization

6. to make something happen

7. to have studied and know a lot about something

8. a group of people who work together in a structured way for shared purpose

Exercise 6. Complete the sentences using the phrases (1-8) from Exercise 4. Change the form of the words where necessary.

1. The role of the police is ... ... that the law is obeyed.

2. She heads the customer services ... .

3. We need to get the support of someone ... ... .

4. William ... ... ... in early Christian art.

5. The article was about the major international aid ... .

6. I didn’t get the job because I didn’t have the necessary ... ... .

7. Find out their names and ... ... to me tomorrow.

8. Who will ... ... ... of the department when Sophie leaves?

Exercise 7. Translate into English.

A. 1. Он опытный водитель.

2. Ездить верхом ни тот ни другой как следует не умел.

3. Мы не можем ручаться за успех.

4. Вы должны обеспечить им всем в совокупности права и преимущества.

5. Он очень влиятельный человек.

6. Организация Объединенных Наций выступает в поддержку и укрепление мира, безопасности и развитие сотрудничества между государствами.

7. Студентов попросили сообщить о результатах исследования.

8. Я руковожу этим отделом.

9. Он несет ответственность за это дело.

10. Кто здесь главный? ( К кому здесь можно обратиться?)

B. 1. Эксперт – квалифицированный специалист в определенной области, привлекаемый для исследования, консультирования, выработки суждений, заключений, предложений и проведения экспертизы.

2. Начальник – это должностное лицо, руководящее или заведующее отделом.

3. Полномочие – право, предоставленное подчиненному на совершение каких-либо действий.

4. Бюрократизм – иерархически организованная система управления, при которой деятельность руководящих органов направлена преимущественно на обеспечение ведомственных интересов в ущерб интересов общества.

5. Бюрократизм - это формализм в ведении дел, приводящий к медленному, затрудненному прохождению необходимых или очередных решений.

6. Гибкость – это мобильность, приспособляемость организаций и лиц, занимающихся экономической деятельностью, к перемене условий.

7. Гибкость – умение, способность быстро изменить способ действий экономического субъекта.

8. Делегирование полномочий – передача полномочий и задач лицу, которое принимает на себя ответственность за их выполнение.

9. Делегирование полномочий представляет собой средство, при помощи которого руководство распределяет среди сотрудников задачи, которые Должны быть выполнены для достижения целей всей организации.

10. Менеджмент – управление производством; совокупность принципов, методов, средств и форм управления производством, разработанных и применяемых с целью повышения эффективности производства и увеличении прибыли.

SECTION 2. SKILLS FOCUS.

Exercise 1. Read the following information and do the task.

Culture is the “way we do things here”. “Here” may be a country, an area, a social class or an organization such as a company or school. You often talk about:

• Company or corporate culture: the way a particular company works, and the things it believes are important.

• Canteen culture: the way that people in an organization such as the police think and talk, not approved by the leaders of the organization.

• Long-hours culture: where people are expected to work for a long time each day.

• Macho culture: ideas typically associated with men (physical strength, aggressiveness, etc).

Task. Which word combination with ‘culture’ describes each of the following? Give your reasons.

1. The men really dominate in this company; they don’t make life easy for women at all. All they talk about is football.

2. Among the management here we try to be fair to people from different minorities, but there are still elements of racism among workforce.

3. Of course, the quality of work you do after you’ve been at it for ten hours is not good.

4. There was a time when managers could only wear white shirts in this company – things are a bit less formal now.

5. Here the male managers talk about the market as if it was some kind of battlefield.

6. They say that if you go home at 5.30, you can’t be doing your job properly, but I’m going anyway.

Exercise 2. Answer the following questionnaire which will help you to think about the culture of your companies.

1. In your organization, criticism:

   1. is aimed at the task< not the person

   2. is only given when asked for

   3. is mostly negative and takes the form of blame

   4. is avoided because people are frightened of hurting each other

2. In your organization, conflict:

   1. is controlled from above

   2. is controlled by rules, procedures and definitions of responsibilities

   3. is resolved by discussion of work issues

   4. is resolved by discussion of personal needs and values

3. In your organization, hierarchies:

   1. are unnecessary because each person is working for his or her own professional development

   2. are necessary to show who has authority over whom

   3. recognize the power and authority of leaders

   4. are sometimes useful for getting the job done

4. In your organization, change:

   1. comes from above

   2. is a question of re-designing rules and procedures

   3. is a considered response to changes in objectives

   4. is a constant process

5. In your organization, people are motivated:

   1. by the possibility of promotion to positions where they have more responsibility

   2. by the opportunity to participate in valuable or creative processes

   3. by seeing that their work is appreciated

   4. by pay or bonuses for goals achieved and problems solved

6. In your organization, most learning takes place:

   1. when people are finding practical solutions to problems

   2. through analysis and logical thinking

   3. as an integral part of the process of working

   4. when people make errors and are helped to identify and correct them

7. In your organization, the most important personal quality you can have is to be:

   1. loyal

   2. creative

   3. professional

   4. rational

8. In your organization, status is given:

   1. to people who find creative ways to help the organization grow

   2. to people who contribute to achieving goals

   3. to distant and powerful leaders

   4. to close and powerful leaders

9. In your organization, people are principally:

   1. human resources

   2. creators

   3. experts

   4. members of a family

The questionnaire classifies companies as four basic types.

Question	Family	Guided Missile	Eiffel Tower	Incubator
1	B	A	D	C
2	A	C	B	D
3	B	D	C	A
4	A	C	B	D
5	C	D	A	B
6	D	A	B	C
7	A	B	D	C
8	D	B	C	A
9	D	C	A	B

Exercise 3. Read the following descriptions and do the task.

The Incubator. The function of the organization is to enable people to fulfill their potential. Relationships grow between people as they work on tasks together. Leaders are treated with skepticism. A high value is placed on creativity. Change can be fast and spontaneous. There is an emotional commitment to the work being done. Managers are enthusiastic. Everyone is equal and there is as little formal hierarchy as possible. Most commonly found in Sweden. Typical of new start-ups and partnerships: doctors, consultants, lawyers.

The Family. There are strong relationships between people at work. The leader is seen as a father-figure. Differences in status between people are seen as natural. Everyone is valuable. Decisions are made at the top. The main types of reward and punishment are the approval and disapproval of superiors. People can act together because they understand each other and the organization. A high value is placed on loyalty to the company and to superiors. Most commonly found in Spain, Greece, France, Belgium, Japan and Singapore. Typical of small and medium-sized firms.

The Guided Missile. Everyone is equal, while having different roles. The organization is oriented to performing tasks and achieving goals. People must do whatever it takes to achieve the goals of the organization. The organization may break up or alter when its goals have been achieved. Individual contributions are recognized and lead to pay rises or promotion. Managers set clear objectives. A high value is placed on practicality. Most commonly found in the USA, Canada and the UK. Typical of large, decentralized companies.

The Eiffel Tower. There are explicit definitions of roles and relationships. Authority belongs to roles, not to the people who occupy them. Everyone is replaceable. People have a strong sense of duty and responsibility. The organization functions because everyone obeys the rules. Decisions are made at the top. The hierarchy is complex and is described formally. Leaders are distant. Most commonly found in France, Germany, Austria and the Netherland. Typical of large, mature companies.

Task.

1. Discuss the advantages and disadvantages of each type of the corporate culture. Give your reasons.

2. Which type do you think would suit you best? Give your reasons.

3. Describe the corporate culture of your company.

SECTION 3. SUPPLEMENTARY READING

Exercise 1. Read and translate the text.

Product departmentalization is the grouping and arranging of activities around products or produce groups. Apex Computers has two product-based departments at the highest level of the firm. One is responsible for all activities associate with Apex's personal computer business, and the other handles the software business. Most larger businesses adopt this form of depart metallization. There are three major advantages to product departmentalization. First, all activities associated with one product or product group can be easily integrated and coordinated. Second, the speed and effectiveness of decision making are enhanced. Third, the performance of individual products or product groups can be assessed more easily and objectively, thereby improving the accountability of departments for the results of their activities. There are also two major disadvantages of product departmentalization. For one thing, managers in each de­partment tend to focus on their own product or product group to the exclusion of the rest of the organization. For another, administrative costs rise because each department must have its own functional specialists for things like marketing research and financial analysis.

Another common base for departmentalization is by function. Functional departmentalization involves grouping together those jobs involving the same or similar activities. (The word "function" is used here to mean organizational functions such as finance and production, rather than the basic mana­gerial functions such as planning or controlling.) The computer department at Apex, for example, has manufacturing, finance, and marketing departments. Functional departmentalization is most common in smaller organizations. There are three primary advantages of functional departmentalization. Each department can be staffed by ex­perts in that functional area. Supervision is facilitated because an indi­vidual manager needs to be familiar with only a relatively narrow set of skills. It is also easier to coordinate activities inside each department. On the other hand, as an organization begins to grow in size, several disadvantages of functional departmentalization may emerge. Decision making tends to become slower and more bureaucratic. Employees may also begin to concentrate too narrowly on their own units and lose sight of the total organizational system. Finally, accountability and performance become increasingly difficult to monitor. For example, it, may not be possible to determine whether the failure of a new product is due to production deficiencies or to a poor marketing campaign.

Under customer departmentalization, the organization structures its activities so as to respond to and interact with specific customers or customer groups. The lending activities in most banks, for example, are usually tailored to meet the needs of different kinds of customers (i.e., business, consumer, mortgage, and agricultural loans). The marketing branch of Apex's computer business has two distinct departments - industrial sales and consumer sales. The industrial sales department handles marketing activities aimed at business customers, whereas the consumer sales department is responsible for wholesaling computers to retail stores catering to individual purchasers. The basic advantage of customer departmentalization is that it allows the organization to use skilled specialists to deal with unique customers or customer groups. It takes one set of skills to evaluate a balance sheet and lend a business $50.000 for operating capital and a different set of skills to evaluate an individual's creditworthmess and lend $10,000 for a new car. However, customer departmentalization also requires a fairly large administrative staff to integrate the activities of the various departments. In banks, for example, coordination is necessary to make sure the organization does not overcommit itself in any one area and to handle collections on delinquent accounts from a diverse set of customers.

Location departmentalization in­volves grouping jobs on the basis of defined geographic sites or areas. The defined sites or areas may range in size from a hemisphere to only a few blocks of a large city. The manufacturing branch of Apex's computer business has two location-based plants - one in Dallas and another in Phoenix. Similarly, the design division of its software design unit has two labs, one in Chicago and the other in St. Louis. Apex's consumer sales group has five sales territories corresponding to different regions of the United States. Transportation companies, police depart­ments (precincts represent geographic areas of a city), and the Federal Reserve Bank all use location

departmentalization. The primary advan­tage of location departmentalization is that it enables the organization to respond easily to unique customer and environmental characteristics in the various regions. A larger administrative staff may be required if the organization is to keep track of units in scattered locations.

Other Forms of Departmentalization. Most organizations are departmentalized by function, product, location, or customer. However, other forms are occasionally used as well. Some organizations find it useful to group certain activities by time. One of the machine shops of Baker-Hughes in Houston, for example, operates on three shifts. Each shift has a superintendent who reports to the plant manager, and each shift has its own functional departments. Time (8:00 a.m. - 4:00 p.m., 4:00 p.m. - 12:00 midnight, and 12:00 midnight - 8:00 a.m.) is thus the frame­work for many organizational activities. Other organizations that use time as a basis for grouping jobs include some hospitals and many airlines. In other situations, departmentalization by sequence is appro­priate. By sequence we mean some differentiating factor such as a number or letter. Many college students must register in sequence: last names starting with A through E in line 1, F through L in line 2, and so on, or student numbers less than 200000 at 8:00 a.m. and those between 200001 and 400000 at 10:00 a.m. Other areas that may be organized in sequence include credit departments (specific employees run credit checks according to customer name), insurance claims divisions (by policy number), and prisons (inmates eat according to serial number or cell block).

Other Considerations. Two final points about departmentalization re­main to be made. First, departments are often called something entirely different - divisions, units, sections, and bureaus are all common syn­onyms. The higher we look in an organization, the more likely we are to find departments referred to as divisions. The underlying logic be­hind all the labels is the same, however: They represent groups of jobs that have been yoked together according to some unifying principle. Second, almost any organization is likely to employ multiple bases of departmentalization, depending on level. Although Apex Computer is a hypothetical firm we created to explain departmentalization, it is quite similar to many real organizations in that it uses a variety of bases of departmentalization for different levels and different sets of activities.

Exercise 2. Translate into English.

Линейная структура образуется в результате построения аппарата управления только из взаимоподчиненных органов в виде иерархической лестницы. Во главе каждого отдела подразделения находится руководитель, который наделен всеми полномочиями. Он осуществляет единоличное руководство подчиненными ему работниками и сосредотачивает в своих руках все функции управления. Сам руководитель находится в непосредственном подчинении руководителя высшего уровня. Вышестоящий орган управления не имеет права отдавать распоряжения каким-либо исполнителям, минуя их непосредственного руководителя. Такая структура используется мелкими и средними фирмами, осуществляющими несложное производство.

Преимущества линейной структуры управления заключаются в единстве и четкости распорядительства и согласованности действий исполнителей. Существует четкая система взаимных связей между руководителями и подчиненными и быстрота реакции в ответ на прямые указания.

Недостатки линейной структуры заключаются в том, что к руководителю предъявляются высокие требования. Он должен иметь обширные распространенные знания и опыт по всем функциям управления и сферам деятельности, осуществляемым подчиненными. Менеджеры высшего звена перегружены огромным количеством информации, потоком бумаг и множеством контактов с подчиненными и вышестоящими.

Функциональная структура предполагает, что каждый орган управления специализируется на выполнении отдельных функций на всех уровнях управления. Выполнение указаний каждого функционального органа в пределах его компетенции обязательно для производственных подразделений . решения по общим вопросам принимаются коллегиально. Функциональная специализация аппарата управления значительно повышает его эффективность. Вместо универсальных менеджеров, которые должны разбираться в выполнении всех функций, появляется штаб высококвалифицированных специалистов.

Структура нацелена на выполнение постоянно повторяющихся рутинных задач, не требующих оперативного принятия решений. Используется в управлении организациями с массовым или крупносерийным типом производства.

Основные преимущества структуры заключаются в высокой компетентности специалистов, отвечающих за осуществление конкретных функций. Менеджеры не решают множество специальных вопросов, и у них появляется больше возможности по оперативному управлению производством. Кроме того, создается основа для использования в работе консультаций опытных специалистов. Вследствие этого уменьшается потребность в специалистах широкого профиля.

Недостатки структуры заключаются в отсутствии взаимопонимания и единства действий между функциональными службами и длительной процедуре принятия решений. Ответственность исполнителей за работу снижается в результате того, что каждый исполнитель получает указания от нескольких руководителей. Часто происходит дублирование и несогласованность указаний и распоряжений, получаемых работниками. Дело в том, что каждый функциональный руководитель и специализированное подразделение ставят свои вопросы на первое место.

UNIT 9. INTERNAL ORGANIZATION.

SECTION 1. KEY VOCABULARY.

Exercise 1. Match the words with their corresponding definitions.

share shareholder to raise capital

interest dividend payment market research

debenture debenture holder stock control

dividend interest payment finished goods

profit

1. money that you gain from selling something, or from doing business in a particular period of time, after taking away costs,

2. to collect capital that is needed to do something,

3. one of the parts into which ownership of a company is divided,

4. someone who owns shares in a company,

5. an interest-paying loan which may be traded on bond markets,

6. a person or organization that has lent money to a company in the form of debentures,

7. a part of the profits of a company for a particular period of time that is paid to shareholders for each share that they own,

8. a payment of a part of a company’s profits to its shareholders,

9. a payment that repays interest on a loan, bond etc., rather than paying off any of the original amount,

10. the activities involved in obtaining information about a particular market, including how much of a product is being sold, who is buying it, why they are buying it etc., or information about what they might buy,

11. the process of making sure that supplies of materials, goods being produced, and finished goods are managed correctly,

12. goods have been made completely and are ready to be sold,

13. an amount paid by a borrower to a lender.

Exercise 2. Read and translate the text.