Explain Various Wages and Compensation Concepts Explain why job evaluation is necessary. Give examples

1. Explain Various Wages and Compensation Concepts Explain why job evaluation is necessary. Give examples 23 August 2010

2. Advance Personnel Management 4 Presentation Lecturer Mr. S Mgudlwa Group Members • Amanda Socenywa • Archibald Mkubukeli • Khaya Valashiya • Boniswa Gae • Lettie Mabena • Grace Malapi

3. Objectives of the presentation Learners will be able to • Understand the nature of the compensation and Job evaluation strategies • Understand the components of a compensation management and job evaluation • Understand the use of variable reward programs • Discuss the use of salary packaging and benefits • Be aware of current compensation issues and trends in compensation management

4. Compensation

5. What Is Compensation? • Compensation is the total reward received by an employee in exchange for services performed for an organization. Dunn JD, Rachel FM, wage and salary administration: Total compensation systems

6. Strategic objectives of compensation The strategic objectives of compensation are to: • Reward past performance • Remain competitive in the labour market • Maintain salary equity among employees • Motivate employees future performance • Attract and retain good staff • Reduce unnecessary staff turnover Alan N, Robert C. Marian B, Strategic human Resource management 2002 4th edition

7. Compensation continued • Purpose of compensation WATSON, S. (2005) is job evaluation making a comeback - or did it never go away? Benefits and Compensation International. Vol 34, No 10, June. Pp8-12, 14.

8. Compensationsystems • Fixed Compensation • Variable or Temporary Compensation Richard I. Henderson, compensation management: rewarding performance 6th edition

9. Compensation cont Incentives and recognition rewards Incentives Rewards Grobler p, Warnich S, Carrell M R, Elbert N .F, Hartfield R.D , Human Resources Management in south Africa 3rd edition 2006

10. Compensation Policy • Matching the competition • Lead policy • Lag approach Fisher Schoenfeldt Shaw, Human Resource Management 1999 4th edition

11. Advantages of compensation Employer • Job satisfaction • Motivation • Low Absenteeism • Low Turnover Fisher Schoenfeldt Shaw, Human Resource Management 1999 4th edition

12. Advantages cont. Advantage to Employees: • Peace of Mind • Increases self-confidence Fisher Schoenfeldt Shaw, Human Resource Management 1999 4th edition

13. Wages . definition • Wages is remuneration received by an employee (group of employees) for service rendered during specific period of time – hour, week, or month. Milkovich, GT&Newman, JM.2002. Compensation.8th edition.Boston: Irwin Mc Graw-Hill

14. Wages continued The main types of wages are: • Subsistence wage; • Minimum wage; • Fair Wage; and • Living Wage Milkovich, GT&Newman, JM.2002. Compensation.8th edition.Boston: Irwin Mc Graw-Hill

15. Job evaluation • Is the process of systematically determining a relative internal value of a job in an organization…………………. EGAN, J. (2004) ‘Putting job evaluation to work.’ IRS Employment Review. No 792, 23 January. Pp8-15.

16. Job evaluation continued • Principles of Job Evaluation • When to use job evaluation • Types of job evaluation CAS. (2008) Job evaluation: considerations and risks. Advisory booklet. London: Acas. Available at: http://www.acas.org.uk/index.aspx?articleid=682

17. Job evaluation continued • Implementing a scheme

18. advantages and disadvantages of job evaluation methods • Job ranking methods • Job classification method • Point method Grobler p, Warnich S, Carrell M R, Elbert N .F, Hartfield R.D , Human Resources Management in south Africa 3rd edition 2006

19. Advantages and Disadvantages continued • Factor comparison method Grobler p, Warnich S, Carrell M R, Elbert N .F, Hartfield R.D , Human Resources Management in south Africa 3rd edition 2006

20. Conclusion • Recommendations