Management for Public and Non-prot Organizations - Essay Example

The Fair Labor Standards Act of 1938 is a federal statute of the USA, which governs job compensation. Its main provisions deal with minimum wages, overtime pay, equal pay and child labor rules. It also requires employers to keep records of the hours the employees have worked. In addition, the Act divides employees into exempt and non-exempt workers. Title 29, Chapter V, Part 541 of the Code of Federal Regulations (1993) defines exempt employees as those who spend 80 percent of their work time performing administrative tasks as their primary responsibility, executive tasks (exercise discretionary decision-making, manage and regulate organization’s work), or professional duties that require outstanding or advanced skills or knowledge (272).

State and local governments are not bound by federal minimum wage requirements. Nevertheless, they can require only the same or higher than the federal minimum wages. Though many people do agree with such a state of things, many oppose it. Opponents of comparable worth claim that pay disparities are a result of supply and demand trends and that the value of labor should be calculated on a scale of socioeconomic value. On the contrary, the advocates of comparable worth believe that labor market rates are not entirely objective.

In fact, the federal courts have not recognized comparable worth under the Equal Pay Act or the Civil Rights Act of 1964. Still, various legislative bodies have acted to remedy pay disparities across jobs of similar value to organizations (277 - 278). To sum up, the Director of HRM should know that compensation systems should be designed in such a way that they will attract, motivate, and retain proficient employees. There is a number of factors that define salaries paid to the employees of public and nonprofit organizations.

Market factors influence external equity, while job evaluation or job worth influences internal equity. Since the hiring criteria for public and nonprofit executives are professional experience and expertise, executives can negotiate employment contracts that assign compensation level and benefits they will receive. In addition, executives of some nonprofit organizations receive bonuses for their agency’s performance.