Know the forms/types of cash compensation

• Base Wage
• Merit Pay/Cost-of-Living Adjustments
• Short-Term Incentives
• Long-Term Incentives

Base Wage

forms/types of cash compensation

cash compensation that an employer pays for the work performed

Merit Pay/Cost-of-Living Adjustments

the forms/types of cash compensation

Perodic adjustments to base wages may be made on the basis of changes in what other employers are paying for the same work, changes in the overall THIS or changes in experience or skill. THAT increases are given as increments to the base pay in recognition of the work behavior.

Short-Term Incentives

the forms/types of cash compensation

 tie pay increases directly to performance

Long-Term Incentives

Define “External Competitiveness”

Refers to pay comparisons with competitors. This has a 2-fold effect on objectives

1.      

Number of Levels

Differentials

Criteria: Content and Value

Pay structure

Number of Levels

dimensions of a pay structure

one feature of any pay structure is its hierarchical nature: the number of levels and reporting relationships. Some are more hierarchical, with multiple levels; others are compressed, with few levels.

Differentials

dimensions of a pay structure

the pay differences among levels. One intention of this is to motivate people to strive for promotion to a higher-paying level.

This and That are the most comon bases for determining internal structures

Know how job descriptions provide a word picture of a job

This is the summary of the job. It is a documentation useful for HR decisions. It contains information on tasks, people, and things included. The job is identified by its title and its relationships to other jobs in the structure. A job summary provides an overview of the job. The section on essential reponsibilities elaborates on the summary. It includes the tasks. Related tasks may be grouped into task dimensions.

What is the final result of a job analysis-job description-job evaluation process?

A structure, a hierarchy of work. This hierarchy translates the employer's internal alignment policy into practice.

Incentives are??

Inducement offered in advance to influence future perfomance.

Define “customer focused” strategy

This business strategy stresses delighting customers and bases employee pay on how well they do this.

How do you evaluate the consequences of an internal pay structure ?

• Efficiency

• Fairness

• Compliance

Efficiency

evaluate the consequences of an internal pay structure

Research shows that an aligned structure can lead to better organization performance. If the structure does not motivate employees to help achieve the organization's objectives, then it is a candidate for redesign.

Fairness

evaluate the consequences of an internal pay structure

Departures from an acceptable wage structure will increase turnover, grievances, and diminish motivation.

Compliance

evaluate the consequences of an internal pay structure

Internal pay structures must comply with the regulations of the countries in which the organization operates.

The systematic process of collecting information that identifies similarities and differences in the work.

What are the characteristics of the point method?

·         Compensable factors

·          Factor degrees numerically scaled

·         Weights reflecting the relative importance of each factor

How do you achieve “internal alignment”?

• Support Organization Strategy
• Support Work Flow: the process by which goods and services are delivered to the customer
• Motivate Behavior: design structures that will engage people to help achieve organization objectives

Name some competitive dynamics used in developing a compensation strategy

Understand the specific industry in which the organization operates and how the organization plans to compete in that industry. What business should we be in, and how do we win in that business? To cope with the turbulent THIS, focus on what factors in the business environment are important today. What will be important in the future? Company strategy, how to complete, how this supports the strategy.

1. to ensure that the pay is sufficient to attract and retain employees

2.       to control labor costs

 the work performed in a job and how it gets done (tasks, behaviors, knowledge required, etc.)

 the worth of the work: its relative contribution to the organization objectives.

1. THese do not  increase the base wage, and so must be reearned each pay eriod

2. the potential size of the THIS payment will generally be known beforehand