Professional Documents
Culture Documents
Questions
What is included in compensation?
When should someone receive compensation?
How does compensation help to improve
organizational performance and give a sustained
competitive advantage?
What is Compensation?
Compensation refers to all forms of financial
returns and tangible services and benefits an
employees receive as part of an employment
relationship
(Heneman, 2007)
Milkovich et al.,
Version of the
Same Ideas
Management
Employees
Shareholders (if publicly traded)
Taxpayers (if publicly funded)
Customers
Government
Society in General
(Milkovich &
Newman, 2008)
See p. 5 for
updated #s
Corporate objectives
strategic plans,
vision, and values
What business
should we be in?
How should total
compensation help
us win?
Business unit
strategies
HR strategies
How should HR
help us win?
Social, competitive,
and regulatory
environment
Strategic
compensation
decisions
Compensation
systems
Employee
attitudes and
behaviors
Strategic Choices
Competitive
advantage
See p. 37
of current
text
Strategy
Innovator:
Increase Product
Complexity and
Shorten Product
Life Cycle
Product
Leadership
Shift to Mass
Customization
and Innovation
Cost Cutter:
Focus on
Efficiency
HR Program
Alignment
Committed to
Agile, Risk
Taking,
Innovative
People
Reward
Innovation in
Products and
Processes
Market-Based Pay
Flexible Generic
Job Descriptions
Cycle Time
Focus on
Operational
Excellence
Pursue Costeffective
Solutions
Do More With
Less
Competitors
Labor Costs
Increase Variable
Pay
Emphasize
Productivity
Customer
Focused:
Increase
Customer
Expectations
Customer
Intimacy
Deliver Solutions
to Customers
Speed to Market
Delight
Customer,
Exceed
Expectations
Focus on System
Control and Work
Specifications
Customer
Satisfaction
Incentives