Professional Documents
Culture Documents
(HRM)
Manpower planning
Increasing output per person per unit of time
Personal management
Administrative support function
Human resource management
Quality HR systems design
1-1
The concept of
Compensation in modern
HRM
Compensation represents both the
intrinsic and extrinsic rewards
employees receive for performing
their job
Intrinsic
Extrinsic
1-2
Intrinsic Compensation
5CORE JOB DIMENSIONS
Skill Variety
Task Identity
Meaningfulness
Task Significance
Autonomy
Responsibility
Feedback Results
1-3
Core compensation
(Direct)
Fringe Compensation
(Indirect)
Extrinsic Compensation
1-4
Base Pay
Hourly Pay (Wages)
Annual Pay (Salary)
Extrinsic Compensation
ELEMENTS OF CORE COMPENSATION
1-5
An Employees Skill Level
An Employees Effort
An Employees Level of
Responsibility
4 COMPENSABLE FACTORS
1-6
Seniority Pay
Human capital theory
Merit pay
Based on performance / effort / result
Incentive pay
Attaining a predetermined objective
Pay for knowledge / Skill based pay
Range, depth, type of skill / knowledge
Pay Systems
1-7
Promote Worker Safety and Health
Maintain Family Income
Assist Families in Crisis
Provide Assistance in Case of
Disability
Unemployment
FRINGE COMPENSATION
Legally-required benefits
1-8
3 Broad Categories
STRATEGIC ACTIVITIES
1-
10
Competitive Strategy
Strategic Decisions
H R strategy
Compensation strategy
COMPETITIVE STRATEGY
1-
12
Lowest Cost: Focus is on Being
the Lowest Cost Producer of
Goods or Services
Differentiation: Focus is on
Offering Unique Goods or
Services
COMPETITIVE STRATEGY
CHOICES
1-
13
Effective When Jobs:
Include Predictable Behaviors
Have a Short-Term Focus
Require Autonomous Activity
Focus on Quantity of Output
DIFFERENTIATION STRATEGY
1-
15
Base Pay Seniority Pay
Incentive Pay Pay-for-
Knowledge
Two-tier Pay
Skill - Based
Broad banding Pay
Merit Pay
Relationship of Compensation
Management within HRM
1-
17
Internal Consistency
Market Competitiveness
Recognizing Individual
Contributions
COMPENSATION GOALS
1-
18
Achieved When the Value of Each Job
is Clearly Defined
Represents:
Job Structure
Hierarchy
Achieved Using:
Job Analysis
Job Evaluation
INTERNAL CONSISTENCY
1-
19
Represents a Companies
Compensation Policies that Fit with
its Business Objectives
Plays a Significant Role in Attracting
and Retaining Employees
Are Based on:
Strategic Analyses
Compensation Surveys
MARKET COMPETITIVENESS
1-
20
INDIVIDUAL
CONTRIBUTIONS
Pay Structures: Pay is Determined
by Employees Credentials, Job
Knowledge, and Job Performance
Pay Grades: Based on Compensable
Factors and Value
Pay Ranges: Builds on Grades,
Uses Midpoints, Minimums,
and Maximums
1-
21
STAKEHOLDERS
Are Individuals or Entities that are
Directly Affected by a Companys
Compensation Practices, Like
Employees
Line Managers
Executives
Unions
Government
1-
22