Professional Documents
Culture Documents
Payment
Part 4 Compensation
GARY DESSLER
Compensation
Compensation is used to elicit the
employee behaviors that the firm needs to support and achieve its competitive strategy.
Compensation manager along with top
management creates pay policies that are consistent with the firms strategic aims.
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External equity
Internal equity
Individual equity
Procedural equity
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Conduct a salary survey of what other employers are paying for comparable jobs (to help ensure external equity). Determine the worth of each job in your organization through job evaluation (to ensure internal equity). Group similar jobs into pay grades.
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SelfConducted Surveys
Consulting Firms
Professional Associations
Government Agencies
The Internet
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Skills
Effort
Responsibility
Working conditions
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Ranking
Job classification
Point method
Factor comparison
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Administrative assistants Grades are jobs similar in difficulty but otherwise different. Mechanics, welders, electricians, and machinists Jobs are classed by the amount or level of compensable factors they contain.
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Point Method
Ranking Method
Classification Methods
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the points or rankings assigned to each job or grade by the job evaluation.
Shows the relationships between the value of the job as
determined by one of the job evaluation methods and the current average pay rates for your grades.
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market rates
Easier for employees to move
seniority
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appraisals
Compile the
Base pay
Short-term incentives
Long-term incentives
Executive benefits/perks
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factors such as the business strategy, corporate trends, and where they want to be in the short and long term.
CEOs can have considerable influence over the boards that
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Professional jobs are market-priced to establish the values for benchmark jobs.
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Competency-Based Pay
Competencies
Demonstrable characteristics of a person, including knowledge,
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Strategic Aims
Performance Management
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5. A work design that lets employees move among jobs to permit work assignment flexibility
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Cons
Pay program implementation problems
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or bands, each of which contains a relatively wide range of jobs and salary levels.
Pros and Cons
More flexibility in assigning workers to different job grades Provides support for flatter hierarchies and teams Promotes skills learning and mobility Lack of permanence in job responsibilities can be unsettling to new employees.
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Comparable Worth
Concept:
Employers should be required to pay men and women
equal wages for dissimilar jobs that are of comparable (rather than strictly equal) value to the employer.
Basis:
Seeks to address the issue that women have jobs that
are dissimilar to those of men and those jobs are often consistently valued less than mens jobs.
Question at Hand:
Who will get to make final decisions on the comparability
of jobs?
Employers
Courts
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compensation-related information.
Increased executive liability for accuracy in corporate
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