chapter 1 compensation

8/3/2019 Chapter 1 Compensation

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A Human Resource Management Approach

STRATEGIC

COMPENSATION

Chapter 1

Strategic Compensation: A Component of Human

Resource Systems


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What Is Compensation?

Compensation represents the rewardsemployees receive for performing their

job. They are either:

Intrinsic

Extrinsic


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5 Core Job DimensionsIntrinsic Factors

Skill variety

Task identity

Task significance

Autonomy

Feedback


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Elements of Core Compensation

Base Pay

Hourly pay Annual salary

Base pay adjustments

COLAs Seniority pay

Merit pay Incentive pay

Pay-for-knowledge/Skill-based pay


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Four Compensable Factors

An employees skill level

An employees effort

An employees level of responsibility

The severity of the working conditions

Courts will use these factors!


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Discretionary Benefits

Three Broad Categories

Protection programs

Pay-for-time-not-worked

Services


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Compensation Benefits Costs

Review the table on pages 9-10

What is the Total Compensation for aRegistered Nurse on an hourly basis?

Per hour, how much does an employerpay for Insurance in the constructionindustry?

What would you estimate MY Paid Leavecosts LTC on an hourly basis?

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Legally-Required Benefits

Federal Legislation Designed to:

Promote worker safety and health

Maintain family income

Assist families in crisis

Provide assistance in case of Disability

Unemployment


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Competitive Strategy

The planned use of company resources

Technology

Capital

Human Resources

2+ years time span

Choices

Lowest cost strategy

Differentiation strategy


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Competitive Strategy Choices

Lowest Cost: Focus on being lowest cost

producer/seller of goods or services

Differentiation: Focus on offering unique

goods or services


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Lowest-Cost Strategy

Effective when Jobs:

Include predictable behaviors

Have a short-term focus Require autonomous activity

Focus on quantity of output


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Differentiation Strategy

Effective when Jobs:

Require highly creative behaviors

Have a long-term focus

Demand cooperation and independence

Involve risk-taking


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Human ResourcesResponsibilities

Recruitment

Selection

Performanceappraisal

Training

Career development

Labor- management

relations

Employment termination

Ensuring legal compliance


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Employment Termination

TwoTypes:

Involuntary

Terminated

Laid-off

Voluntary

Quit

Retired


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Employment Legislation

Davis Bacon Act 1931 prevailing wage

Fair Labor Standards Act of 1938

Equal Pay Act of 1963

Civil Rights Act of 1964

Pregnancy Discrimination Act of 1978

Americans with Disabilities Act of 1990

Family and Medical Leave Act of 1993 Recent amendments to both the ADA and the FMLA


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Compensation Goals

Internal consistency

Market competitiveness

Recognizing individual efforts


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Internal Consistency

Achieved when the value (qualifications, duties,responsibilities) of each job is clearly

defined

Represents: Job structure

Hierarchy

Achieved using: Job analysis

Job evaluation


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Market Competitiveness

Compensation policies that fit with business

objectives

Vital in attracting and retaining employees

Arebasedon: Strategic analyses

Compensation surveys

chapter 1 compensation

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