Chapter 11 discussion-hr management

Ace your studies with our custom writing services! We've got your back for top grades and timely submissions, so you can say goodbye to the stress. Trust us to get you there!


Order a Similar Paper Order a Different Paper

PLEASE ANSWER THE FOLLOWING QUESTION… Some companies have “open compensation” plans where everyone can find out what anyone else in the company is making. What are the advantages to this? Would you want to work for a company with an open compensation plan?

AN EXAMPLE…

Open Compensation plans are important aspects of an employee’s satisfaction in the workplace, as this could directly impact the employee’s performance and motivation at work. There are big benefits for workers and employees to know their salaries and pay, as this will bring a decrease in pay disparities. The transparency of the salary structure ensures the employees that their performance will increase, which should give confidence towards equal treatment and as a result to see that they receive equal pay for similar jobs. In an open compensation plan, there shouldn’t be any conflict among the employees within the company when they both work for the same position as the result being they will be able to view each other’s salaries and determine the fairness based on their own experience and performance. Those who are in high performance would enjoy the open compensation plans more, as this will show their results on a pay-for-performance level and based on seniority if the company chooses to view their employees like that. I would like to work for a company with an open compensation plan as the pay would increase my motivation to work, as I would be able to view my co-worker’s salary. 

1

Human Resource Management: Functions, Applications, Skill

Development by Robert N. Lussier and John R. HendonChapter 11

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Compensation

�Is the total of an employee’s pay and benefits.

�Costs are frequently 65 to 70 percent of total

production costs in today’s firms.

�Affects the process of both attracting and of

retaining employees.

� Therefore, firms should design the system

to meet the various needs of employees.

2

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

The Compensation System

Includes anything that an employee may value and

desire and that the employer is willing and able to

offer in exchange.

Compensation components – all rewards that can be

classified as monetary and in-kind payments.

Non compensation components – all rewards other

than monetary and in-kind payments (e.g. company

cafeterias and gyms).

3

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Types of Compensation

Base pay – Wages are paid on an hourly basis;
salary is based on a longer time period.
Wage and salary add-ons – includes overtime
pay, shift differential, premium pay for working
weekends and holidays, etc.

Incentive pay – (a.k.a. “variable pay”) is “pay for
performance”, and commonly includes piece
work in production and commission sales.

Benefits – indirect compensation that provides
something of value to the employee.

4

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Motivation and Compensation Planning

Goal of compensation – to motivate employees to do

the things the firm needs, consistently, over time.

Expectancy Theory – employees believe the rewards

for accomplishing a task are worth the effort.

� Clearly define goals and how to achieve them.

� Tie performance to rewards.

� Be sure rewards have value to employees.

� Make sure management does what it says it will.

5

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

6

2

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Motivation and Compensation Planning
Equity theory – employees are motivated when the
ratio of their perceived outcomes to inputs is at
least roughly equal to other referent individuals.

� Employees perceive being under-rewarded
�decrease inputs, increase outcomes.

� Employees perceive being over-rewarded – this
does not usually disturb employees.

� Employees perceive being equitably rewarded –
will continue to perform if still content that their
incomes and outputs are in balance.

7

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Learning Theories

Positive reinforcement – if employees get something
they want in return for doing what the firm needs, they
are more likely to continue doing the same.

Negative reinforcement – firms take away something
employees don’t want, motivation increases.

Avoidance reinforcement – work standards dictate
work/compensation levels.

Punishment – used when employee do not meet work
standards.

8

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Organizational Philosophy ���� Decisions

Ability to pay.

What types of compensation?

Pay for performance or for longevity?

Skill-based or competency-based?

At, above or below the Market?

Wage compression.

Pay secrecy.

9

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Legal and Fairness Issues in Compensation

Firms must offer equal pay for equal work,

unless there is a difference in productivity,

seniority, merit, or other factors “other than

sex”.

10

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

11

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Fair Labor Standards Act of 1938
(Amended)

Covers minimum wage, overtime issues, and
child labor rules for most U.S.-based businesses.

Minimum wage is the lowest hourly rate of pay
generally permissible by federal law.

�Employees with specific duties are exempt
from minimum wage, overtime, and child
labor rules.

12

3

Compensation

Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

13

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Overtime

A federally mandated, higher-than-

minimum wage, required for nonexempt

employees if they work more than 40

hours/week.

�Is currently set by the FLSA as “time and

a half”, or 150% of the employee’s

normal wages.

14

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

FLSA and Child Labor

� 14 and 15 year olds may work outside school hours

no more than ”three hours on a school day, 18 hours

in a school week, eight hours on a non-school day,

and 40 hours in a non-school week.” Permissible

work hours are also restricted.

� 16 and 17 year olds cannot be employed in

hazardous jobs, but their work hours are

unrestricted.

� Individuals 18 or older can be hired for all work.

15

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Pay Equity and Comparable Worth

Comparable worth – when jobs are distinctly
different but entail similar levels of ability,
responsibility, skills, and working conditions,
they are of equal value and should have the
same pay scale.

�The comparable work concept is broader than
“equal pay for equal work” because the work
need only be similar, not the same.

16

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Job Evaluation

Is the process of determining the worth of each position
relative to the other positions within the organization.

Job ranking – subjectively ordering jobs from lowest to
highest or vice versa, in terms of value to the company.

Point-factor – objectively breaking down a job into
“compensable factors” and applying points to each factor
based on the job’s level of difficulty.

Factor comparison – analyzing and ranking
“compensable factors” of benchmark jobs in pay surveys
and ranking all of the firm’s jobs against the benchmark.

17

Compensation

Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

18

4

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Job Structure and Pay Levels

Pay structure creates a hierarchy of jobs and their

rates of pay within the organization; made up of job

structures and pay levels.

� Job structure is the stacking up of the jobs in the

organization from the lowest to the highest levels.

� Pay levels provide minimum to maximum pay for

a group or subset of jobs in the organization

19

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Creation of Pay Levels

A single pay level (a.k.a. “pay grade”) is made
up of several to many different jobs.

�Each pay level has a maximum and minimum
pay rate.

�Pay rates are determined by comparisons
with Labor Market Competition (minimum
pay level), Product Market Competition (top
pay level), and supply and demand, to insure
equity.

20

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

21

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

22

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

23

Compensation

Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

24

5

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

Delayering and Broadbanding

Delayering – the process of changing the

company structure to get rid of some of the

vertical hierarchy (reporting levels).

Broadbanding – the combining of multiple pay

levels into one.

25

Compensation Management

Human Resource Management: Functions, Applications, Skill Development by Robert N. Lussier and John R. Hendon © 2012 SAGE Publications, Inc.

26

Writerbay.net

Looking for top-notch essay writing services? We've got you covered! Connect with our writing experts today. Placing your order is easy, taking less than 5 minutes. Click below to get started.


Order a Similar Paper Order a Different Paper