money that a person is paid per hour. A person
who is paid hourly wages is eligible for over-
time pay. A salary is an annual amount of
money that a person is paid. Managers and pro-
fessionals are usually paid a salary instead of an
hourly wage. People who are paid a salary usually
do not get overtime pay. People who are paid a
salary are often eligible for bonuses.
Although many people love their work, peo-
ple work to earn money. In order for a business
to get the best workers, the business has to pay
the workers a competitive wage. For example,
suppose you are applying for a job as a busser at
two restaurants. The restaurants are the same in
every way except for the wages offered. One
restaurant is offering $8.00 an hour. The other is
offering $8.75 an hour. Most people would take
the job with the higher wage.
One of the responsibilities of HR is to know
what other businesses are paying their workers.
HR does this through wage and salary surveys.
HR uses this salary information to develop a
report for management. HR then works with
management to decide what wage or salary
to offer for each job in the company. A list of
wages and salaries paid for each job is called a
wage and salary scale.
Another part of compensation is benefits.
Benefits include all forms of compensation
other than salary and wages. One benefit
that most employees get is social security.
Social security is a federal program that ensures
that workers will get some income after they
retire. Social security was established through the
Federal Insurance Contributions Act (FICA).
Through FICA, the federal government takes a
small percentage of every worker’s paycheck
and puts it in the social security fund. The bene-
fit part is the employer’s contribution. For each
employee, the employer contributes to the social
security fund an amount equal to the amount of
money that the employee paid.
Chapter 17 Human Resources
385
17-2 This member of the HR staff is using the phone to screen candidates and check references.