Download - HRM 730 Group 3_chapter 11
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Individual pay
Variable Pay
Incentive Programs Gain-sharing
Merit Pay Issues
Pay Innovation
Pay Issues
Learning Objectives for C-11
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Individual Pay
Why she is paid higher than me ? I have been
here longer than her!
Why she is paid higher than me? I have more
tasks to do
------ ? She has no paper at all
------ ? I can complete the work faster thanher.
------? I can even do the work better, (quality)
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Experiences,
seniority
performance
Skills, qualification
Individual pay is based on.
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Individual pay methods..
Flat rate
Payment for time
worked
Variable Pay- Incentive
Compensation
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Time worked.
HigherPay!
Skill,
knowledge
Seniority and
experience
Performance,attitude,
mindset
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Variable Pay
Merit Pay
Offshore
Allowance-
Risks
Production
Bonuses
Individual
Incentives
AnnualBonuses
MealAllowance
Cost of Livingadjustment
ClothAllowance
Commissions
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Incentive Program
Star of the
month
Safe worker
of the month
Point system
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Gain-sharing
Gain-sharing is best described as a system of
management in which an organization seeks
higher levels of performance through the
involvement and participation of its people. As
performance improves, employees share
financially in the gain. It is a team approach;
generally all the employees at a site oroperation are included
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Gain-sharings advantages
Help companies achieve sustained improvement in keyperformance measures
Rewards only performance improvement
Payouts are self-funded from savings generated by the plan
Aligns employees to organization goals
Fosters a culture of continuous improvement
Enhances employee focus and awareness
Increases the feeling of ownership and accountability
Enhances the level of involvement, teamwork and cooperation
Supports other performance improvement efforts and helpspromote positive change
Promotes morale, pride, and more positive attitudes toward theorganization
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Gain-sharings disadvantages
Measures are narrower than organization-wide profit and thereforegains may be paid even though profits may be down.
Requires a participative management style
Requires that management openly shares information related toperformance measures
Employees may question or challenge management decisions thatmay adversely impact a gain.
Increases the level of organizational stress since everyone has moreof a financial stake in the organization's success
Applies best to and a work environment that requires teamwork
and collaboration rather that individual entrepreneurship Paid on the basis of group performance rather than individual merit
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Merit Pay Issues
Unable to achieve objectives for the team
Selfish, work independent, unwilling to help
others- affect work output
Perceive as inequity
The size of the pay has little effect on
performance
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Pay Issues
Pay Security
Guaranteed annualwage (GAW)
Supplementary
unemployment
benefits
Cost of Living
Adjustments
Pay
Compression
Younger staff paid
as high as longer-
term employees
Pay secrecy
or openness
Secrecy
Openness
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Pay Innovation
People based Pay
Skill-based pay
Knowledge-based pay
Credential-based pay
Feedback pay
Competency-based pay
Executive Pay