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Objective

Objective. Chapter 9 (Chapter 11) Establishing Rewards and Pay Plans. Presenter: Sayed Moammer Mazhary BBA (Marketing & Finance) MBA (HRM) HR Manager KIHE. Outline. Introduction to Chapter Compensation Administration Job Evaluation and Pay Structure. Introduction.

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Objective

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  1. Objective Chapter 9 (Chapter 11) Establishing Rewards and Pay Plans Presenter: Sayed Moammer Mazhary BBA (Marketing & Finance) MBA (HRM) HR Manager KIHE

  2. Outline • Introduction to Chapter • Compensation Administration • Job Evaluation and Pay Structure

  3. Introduction • People do what they do to satisfy some need and they look for a payoff or reward. • The most obvious reward is pay, but there are many others, including: • promotions • desirable work assignments • peer recognition • work freedom

  4. Introduction

  5. Types of Reward Plans Intrinsic versus Extrinsic Rewards • Intrinsic rewards (personal satisfactions) come from the job itself, such as: • pride in one’s work • feelings of accomplishment • being part of a work team

  6. Types of Reward Plans Intrinsic versus Extrinsic Rewards • Extrinsic rewards come from a source outside the job • include rewards offered mainly by management • Money • Promotions • Benefits

  7. Types of Reward Plans Financial versus Nonfinancial Rewards • Financial rewards include: • wages • bonuses • profit sharing • pension plans • paid leaves • purchase discounts • Nonfinancial rewards emphasize making life on the job more attractive; employees vary greatly on what types they find desirable.

  8. Types of Reward Plans Performance-based versus Membership-Based Rewards • Performance-based rewards are tied to specific job performance criteria. • commissions • piecework pay plans • incentive systems • group bonuses • merit pay • Membership-based rewards such as cost-of-living increases, benefits, and salary increases are offered to all employees.

  9. Compensation Administration • The process of managing a compensation program so that the organization can attract, motivate and retain competent employees who perceive that the program is fair.

  10. Compensation Administration • Job evaluation – the process used to determine each job’s appropriate worth within the organization. • Based on job analysis information.

  11. Compensation Administration Government Influence on Compensation Administration • Fair Labor Standards Act: 1938 act which requires • minimum wage • overtime pay • record-keeping • child labor restrictions

  12. Compensation Administration Government Influence on Compensation Administration Fair Labor Standards Act • Exempt employees • include professional and managerial employees • not covered under FLSA overtime provisions • Nonexempt employees • eligible for premium pay (time and one-half) • when they work more than 40 hours in a week

  13. Compensation Administration Government Influence on Compensation Administration • Equal Pay Actof 1963 act requires that men and women hired for the same job be paid the same.

  14. Compensation Administration Government Influence on Compensation Administration • Civil Rights Act: • broader than Equal Pay Act • prohibits discrimination on the basis of gender • used to support comparable worth concept • Salaries should be established on the basis of skill, responsibility, effort, and working conditions.

  15. Job Evaluation and the Pay Structure Job Evaluation • Use of job analysis information to determine the relative value of each job in relation to all jobs within the organization. • The ranking of jobs • Labor market conditions • Collective bargaining • Individual skill differences

  16. Job Evaluation and the Pay Structure Isolating Job Evaluation Criteria • Judgment is involved in defining what factors should be used to compare jobs. • Typical criteria: • mental requirements • supervisory control • complexity • physical demands • personal contacts

  17. Job Evaluation and the Pay Structure Isolating Job Evaluation Criteria • Typically jobs are grouped according to type and compared within their group • clerical jobs • sales jobs • professional jobs

  18. Job Evaluation and the Pay Structure Job Evaluation Methods • Ordering method: A committee places jobs in a simple rank order from highest (worth highest pay) to lowest.

  19. Job Evaluation and the Pay Structure Job Evaluation Methods • Classification method: • Jobs are placed in classification grades • Compare their descriptions to the classification description and benchmarked jobs • Look for a common denominator such as skills, knowledge, or responsibility

  20. Job Evaluation and the Pay Structure Job Evaluation Methods • Point method: • Jobs are rated and allocated points on several identifiable criteria, using clearly defined rating scales. • Jobs with similar point totals are placed in similar pay grades. • Offers the greatest stability.

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