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HRMandRemunerationSystems,Rewards&methodsofreward,Thewage-workbargain.Centraltoemploymentrelationship®ulationOfferAcceptance-Consideration(incentivepackage)unilateralorbargained?Buyer-sellerpower?Tailoredorstandardised?Individualorcollective?TheCashNexusEnidMumfordscontractsRewardssystemsvs.Payrolladmin.,Pay-offsintheEmployer-EmployeeRelationship,Knowledge&skillErwantsknow-how,competence,experience.Eewantstobeputtogooduse&bedevelopedEfficiency/rewardsErwantsperformance&qualityoutput.Eewantsequity,felt-fairrewards&opportunityEthical-values&commitmentsinright/wrongbehaviourPsychologicalMgt&co-workerswantcommitted,loyal,motivatedpeople.IndividualwantssatisfactionTaskstructure-workwithinpolicy,procedure&technicalconstraints.Jobs,workarrangements,(Mumford1972),Keep-T,Issuesinpaypolicy,package&administration,IntegrateEe.performancewithcompetitiveadvantage?Smooth,reliable,lowrisk,transactions.Handingoverthecash:personalorseparated?Traditionalmethodsprevail.Wherearetheinnovations?Paypolicy-closetmanagement?HRMpolicy-maker,practitioner&academicinterests?RewardscentraltoHRMmodels?Theory&practice.Partial?Coherent?robust?Thin,incompletepictureandtreatment?,TixylixPrescription(readthelabel),Proposition:RewardsystemXwillbenefitorganisationalefficiency&effectivenessEmployerOurpolicyshouldproperlyreward&motivatestafftocontributeeffort,expertise&commitmentinlinewithorganisationalobjectives.Ourrewardsystemmustberightforthefirm(paybill&administration)&employees(attracting,motivating,retainingtherightstaff).Employee(felt-fair,equity,expectancytheory)“therewardsystemshouldreflectmywork&itsdemandsonme,myvalue(formykindofwork)withinlabourmarket(internal/xternal).Itshouldsatisfymewhencomparingmyrewardswithwhatothersgetforthesamekindofwork”.,ContextandPressures,Porter-productinnovation+costleadershiplowlabourcostsvs.recruitment,retention&motivationRateforthejobjobclass&worktechnologyLocationinlowwageeconomiescommitment&flexibilityConvergence:white/blue,office/factorycompetenciesTeam-working,flexibility,harmonisationRegionalmarketforces(theCity,Leeds,Delhi).Labourmobility(betweenoccupations+Europe)Salaryleagues(MNCs&Euro/globalmanager),ExaminingRewardSystemConceptsandPractices,Patternsandtrendsinpolicy&practice?PropositionsandAssumptions?Testsforthepropositions/hypotheses?Competingconceptsandperceptions?Veracityoftheimperatives?,Determinism,RhetoricandVerification,Debate:determinism:individualperformancepayPayindividual/groupperformancePRPparadigmshiftrhetoricvs.practiceseachangeortraditionaladhoceryextentofchange(coverage&operation)innovation-forthefeworthemany?normativeassumptionsintheuseofrewardsystemscentraltoormarginalinSHRM?,Underutilised&sophisticatedmechanismsorcrude,problematictoolstodriveperformance?,Evidencefor,rewardsystemdevelopmentsreinforcingorganisationaltransformationsSomenew,distinctivefeaturesinpolicy&practice.Dothe“claims”-deliver?Areourconceptsofappropriateorviablepayrigorousenough?Whataretheseperceptionsandwhatholddotheyhave?,PaymentSystems19452000,Distinctivefeatures?Howhavesystemschangedovertheyears?Currenttrends?AHolyGrailquestforaperfectpaysystem?Fads,fashions&cycles.Since1945TraditionalsystemshaveevolvedslowlySomeinnovativeandmarginalchangesNewsolutionsassociatedwithSTEEPLE.,DesignFeaturesofPaysystems,Monetarynotrelatedtoperformance-timeperformance-linkedOutput,%,PRP,meritpay,commission,skill-basedcollective-outputschemesCorporateperformancerelatedbonuses+profitparticipationMonetary-equivalentCar,phone,holidays,loans,accommodation,fees,vouchersDeferred(promotion,pension)Non-monetary-status,recognition,plaques,empowermentIntrinsicbenefitsNegativespressure,penalties,harassmentside-lining,dismissal,SamEilononRewardSchemes,Eilon,S,1992,Managementpractice&mispractice,Routledge.http:/sol.brunel.ac.uk/jarvis/bola/rewards/rewards.htmlintegraltomanagerialplanningandcontrolprocesses.shouldnotbeconsideredinisolation.Rulesguide,butnotethecontradictions&dilemmas.Rigidimplementationmayhaveawkwardconsequences.Thereismoretoasimplecarrot&stick,effort-rewardrelationship.,EilonsRulesofThumb,Incentives-notconfinedtomonetary-seenon-monetary.Attainmentsrewards:levels&rewardsshouldbeclear.Theactualeffort/responsibilitylink?Individualgoals/attainment&dept/orgn.GoalsIndividualattainmentvs.whatothersmustachieve?Rewardsforhelpingothers-supportstaff.Re-structuring:jeopardiserewardpossibilities?Products&workingpracticeschange?FuturepayprospectsshouldnotunderminewhatEehasalreadyachieved.Benefitinpenalisingundesirableresultsorbehaviour?PeriodicReviews-schemeobjectivesmustremainvalid.,Componentsinpaybytimeschemes,simpletoadministerdefinedtimeF/T,P/T,mixed-time,casual.Notime,nopay?Hourly,weekly,annualPremiums1.5T,2T,nights,“doorknobsyndrome”Controlmechanisms&toolsclocks,supervision,timesheets?Jobevaluation-evaluatethejobnotthepersondoingitFlexi-timeschemesSupervision&performance“Whenthecatsaway”?Assumetrust,confidence,competence&diligenceOff-siteworking.Isactualpresencenecessary?WorkforErinErtimeversus.inyourtime?Assumefidelity,care,good-will,cooperationLifesentence?,Payforperformancesystems,Jobdefinition,MbO,method&workstudy.Informationandcontrol.,PRP,meritpay,skill-basedschemes,InformationrequirementsManagerappraisalandjudgementMeasurable,targetedPRP(narrowlydefined).Paylinkedtoconcreteindividualorgrouptargets.Individualmerit(behavioural)traits:e.g.flexibility,cooperation,punctuality.Staffappraisalratingcriteria.Skill,physical&mentalcapabilities.Automaticonqualification?Performance-related?Annualincrements?,Collective-outputschemes,workgroup,plantorcompanyperformance-bonus(fixedor%ofstandardpay)automaticforachievementoftargetedoutput,profit,salesoraddedvalueGenerallydonotrequireemployeeappraisalormanagerialdiscretion(?.nottopay.?).Schemeformula:complexity,visibilityoftargetsachieved.,Employeeshareownershipschemes,Seniormanager-ownersExtensionofownership&participationpay?SocialengineeringassumptionsRewardsfromcapitalgains÷ndslongtermThesmallprintsharepricescangoupordown!Dependentuponcapitalbeingavailable-tobuysharesforemployees.,Lupton&Gowler:Selectingapaymentsystem(1969),Analyticalframeworkfor“selecting”apaymentsystemcontingencyapproach(normative&rationalframework)Proposition:choicescan&shouldbebaseduponrecognitionofmanagerialgoalsmanagerappreciationofinternal&externalcircumstances.BUTradicalchoiceordoP-systemsmerelyevolve?Traditionalschemes.vs.whatalternatives?Managerial&employeepreferences?Prevailingexpectations.Whattrendsarediscernable?,Payschemedevelopment-contingencyandchoice,Proposition:designtheP-systemtofitthegoal/circumstances.True?How?Evidence?managerialresponsetointernal&externaldemands.Whythesedesigns?Reactiveorproactive?How&howfrequently?Whoisinfluentialindesign?Institutionalpromotion&reformofpaydetermination.(informed)prescriptions&recommendationsNBPI,CIR,ACAS,CBI,IoD,IPD,TUs,DfEE.ACASonappropriatenessapaymentsystemhasabetterchanceofsuccessifitiscarefullyselected&shapedtomeetthespecificneedsoftheorganization&workgroupinwhichitistoapply.,Paydevelopments,pieceworkschemes1945-1960stimulatedbylabour&productmarketpressures.wellsuitedtohigh-volume,low-costproductionwhatweretheproblemsItemisation&localbargaining?Gold-bricking?productivitybargaining1960stomid-1980ssearchforcontrol&societaljustification(incomespolicy)Manning,demarcation&craftflexibility.Jobenlargement&workrestructuring.ParticipationinEquityPerformance-relatedpay1980s-todate,Governmentalintervention,IncomespoliciesnationalandpublicsectorcontrolsPrivatisation&deregulationoflabourmarketEmployeeshareownershipNationalminimumwage&48-hourrulingEqualpay&equalopportunitiesTaxationCastigationofhighexecutivepaybutnoregulation.,HRMmodels?,Proposition:Reward.akeypolicy-makinglevertoachieveCommitmentFlexibilityQualityStrategicintegration.Linksbetweenrewards&suchgoalsarenotnew.Bpetitiveadvantage&theargumentforstrategicintegration.Isthereevidence?,TightandLooseViews,Looserresponsesaremoreadhoc,reactive&opportunistic.Tightcoherent,managerialrationaleexists-rewardsystemselectionsensitivetobusinesscircumstances&needsrewardsunderpinbroaderbusinessplansdiversification&productlifecyclestrategiescompanyre-structuring,flexibility&culturechangesupportotherHRMinterventions.ButAretheeffortssotightlyarticulated?Theory+consistencyinapplication&outcome.,Haveorganisationschangedtheirapproachtopay?,individualperformance-relatedormerit-basedpayschemesindividualisationofpay-public&private-filtersdownthehierarchy.ACAS(1985-88)40%modifyP-systemscloserpay-performancelink.Byend19924,000approvedprofit-relatedpayschemes(1millionemployees)2000employeeshareownership(3million)WIRS1990meritpaymoreprevalentatseniormanagerlevelevidenceinadmin.(33%)+skilledmanual(25%)Arethesedeep,structural,qualitative,strategicchanges?,PayandHRMgoals:commitment,flexibility&quality.,featuresandcontexts?potentialtensionsinthelinkages?thedynamicsforchange?,Reward&commitment,longhistory,on-goingmanagementconcernmotivation&performance,incentivestostrengthenidentification&loyaltyTaylor,McGregor&Herzbergweakencompeting(oftencollective)interestsHaltthedilutionofmanagerialprerogatives.PESTconditionshelpmanagerialrecoveryNewparticipatione.g.shareownership&profit-sharingstatutorysupport,Butaretheschemeseffective?,Researchintoparticipation&staffattitudesreturnsambiguousresults.Somepositiveimpact.withdoubtsProblem:Isolatingtheparticipationvariable&corporateperformance.Otherinvolvementtechniquesinthechangeprogrammes.Blinder(USAstudy)thewayworkersaretreatedmayboostproductivitymorethanthewaytheyarepaid.,Visible,meaningfulwaystolock-intheindividual.,Dialogue&bonding.Performanceappraisal“forces”directcommunicationStrengthenlinemanageremployeerelationshipIndividualisetheeffort-rewardbargainNoexternal3rdparty.,Underminecollectivebargaining?,Profit&shareinitiativesreduceTUorientation.PRPschemes-lessinevidencewhereTUsarestrong.De-recognition?,Reportson,BritishRail&TSSA-10,000middle&juniormanagersPRP&individualseniormanagercontracts-ahintofTUde-recognition(ThamesWater,Amersham&BT).NUT&PRP-relatedteacherappraisalSomeTUsayinPRPoperation.agreeperformancecriterianegotiatesizeofkittyvs.itsdistributionrepresentingappealsagainstappraisal&payjudgementsdisclosureofinformationviaCentralArbitrationCommittee&monitorsystemfairnessAfewunfairdiscriminationcases(sex/race&merit-pay),PRPvs.Commitment-compatibilityinpractice,IndividualPRPrewardsnarrow&short-termachievement?underminegroupcooperation&longer-termgoals?Corporatefinancialconstraints+evidenceweakresultsmaylimitprofit-sharingpay-outs&bonusesDisappointment-disaffectionProceduralinjusticesubjectivity&inconsistencydisaffectionindividualPRP:moreintunewithhardHRM.employeeappraisal-ajudgmentalprocesspenaltiesfromfailuretomeetstandards.managementcontroloverthepaybill?Individualdealsacross-the-board,cost-of-livingincreases.,ComparewithsoftdevelopmentalHRM,Reward&employeeflexibilityintasks/duties,perennialmanagerialgoal.Managerprerogativetodistributework“rationally&flexibility”?CountervailingemployeepressuretostructuretheuseoflabourReasonablenessundercontract(notinmyjobdescription)theUnioncustom&practice,(workerculture)Job-evaluatedgradingstructuresfacilitateflexibilityintheperformanceoftasks.Trueorfalse?,Job-evaluatedgradingstructures,Largemechanistic,bureaucracies.Principlesestablishainternallyconsistentsetofjobratesevaluatethejobnotthepersondoingit.ensurerelativities:internalequity.Systematicallycompare&measuredifferentjobswithinthesameorganizationIfindividualperformancemeritsit-PROMOTE.JEgradingstructureslacksensitivitytoexternalmarketpressures.STEEPLEpressuresflexibilityimperativesintensify,Rewardstructureossification,CivilService&localauthorities-paysupplementsforshortagejobs(responsetolabourmarket).Canunwieldygradingstructures&demarcationscopewithjobredesign,technologicalchange&newproductionmethods?teamorcellularworking&flexibilityacrossskills&tasks?changingorganizations-lean,flexiblestructuresdynamiccircumstances-stressadaptiveperformancebeyondrigid,ossifiedjobdescriptions&evaluatedgrades.,Grow,develop,perform!Out-growjob&bepromoted!,Jobevaluationnotabandoned.WIRS1980-90-workplaceswithJ.Evalschemesrisefrom21-26%Countervailingpressure-equalpaylegislation(evaluatedstructures)Incompatibilityofjob-evaluationwithPRP?Modifythestructures.How?Basegradesongenericjobdescriptions&broadbands(flexibilityoftaskperformance).Movefromgrades&fixedincrements,tomin-maxranges&givescopeforindividualperformance.,Growthstructures-formalcareerpaths&criteria.,professionalandtechnicaljobfamiliesachievementofqualifications&competencestandards(motiononlywhenvacanciesarise).harmonisemanual&white-collarterms&conditionsmulti-skillingPromotionrouteforthegoodtechnician,nurse,scientistorengineernotbecauseyouareamanager.ThenursingconsultantThetechnicalconsultant(programmer),Asurfeitofriches,higherEeexpectationsnotallcanbefulfilled.payforunwantedskills?Flexibilitywedontneed.extendedgrades,growth&skillsacquisitionstructures.Managersover-estimate&dontuse.PirelliAberdareLowstaffturnover&localunemploymentSuspendtheskillacquisitionscheme,PRPmayinhibitencourageflexibility.,personalizedtargetscanencouragearigid,narrowfocusonshort-termobjectives.LessattentiontodailytasksthantargetsheetsEeasalabourcontractor,performancejudgedoncontractmeasuresvs.widerperformancecriteria(future&potential).iftargetsareuncertain,fixedpaycontractsrestrictthescopeforflexibility&discretion.,Reward&quality,qualitycostorvolumetodaysimperativeleanerproduction-combinespeed+qualitymaintenanceTQMinitiativesraisequestionsaboutthestructure&administrationofrewardsystems.Schonberger(1992)Oncereward&recognitionwerereducibletolittlemorethantwomonetarynumbers,wages&benefits.SinceTQMisacontinuouspushforimprovement,themanagementsystemmustitselfcontinuouslyshift,prod,encourage,praise&reward(p.21).Implicationsfortherangeofrewardsavailablefrequencyofapplicationtheneedtorewardcontinuallymanagementskills.,Rewardingcontinuously?Newmanagementskills.,Establishingvalid&viableperformancecriteriaJudgingiftargetshavebeenmet-assessingtherelationshipbetweenassessedperformance&rewardsInterpersonalskills:coaching,counselling&interviewing.,Piecework,Simple,direct,mechanisticpay-outputlink.Controlsmotivation&productivity.Criticismofpieceworkschemesbutwasthereapositivelinkbetweenpiecework&productivity?Prematurerejectionofeconomicman?,Aperformancemanagementbacklash,Proposition:Managerscanensurehighperformancebyassessinganemployeeforpaypurposesonceayear,versusProposition:Acloser,ongoingmanagement-employeerelationshipismorecapableof“motivatingperformance”.AshiftfromM-bycontroltoM-byleadership.,Leadersmust,ensurethatthebroadpictureisknown,understoodrelatethistomeasurablepersonal&teamobjectivesaidjobsatisfactionthroughfeedback-performance&objectives.discriminateintherewardgivenstandardvs.exceptionalunderstandtheiraccountabilityforpeople.sendoutclearquality&performancemessages.,BasedonStoreysreportofNatWest,Warning,withoutrequisiteskills,P-systemmaybecomediscredited.HRMguidancetolinemanagersonschemeoperationtightdefinitionsofperformanceobjectivesassessedperformancelevelsthedistributionofmarkingsstimulatesresentmentoverpersonnelintrusion,Payandthepursuitofquality,wetakequalityseriouslybysettingquality-relatedtargetsandcreatingapay-qualitylinkSymbolismandcredibility.USCarcompanycase:Employeesunconvincedofcompanycommitmenttoquality.Dept.managerssettargets(withbonuses)forQ-relatedgroupactivities.RankXerox:Europeanexecutiveperformancepartlylinkedtocustomersatisfaction&loyal

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