Compensation薪酬福利管理.ppt

1、Human Resource Management,Compensating Employees,Framework for the Strategic Management of Employees,Strategic Purposes of compensation,Attract (the right sort of) people to work for firm Retain (the right sort of) people to work for firm Control Costs and Maintain a budget Motivate exceptional perf

2、ormance Reward employees for past performance Reduce unnecessary turnover Maintain salary equity among employees Also - Reinforces (or conflicts with) the attitudes and behaviors encouraged with the performance management system.,What is Compensation?,To counterbalance To make up for To offset (indu

3、cements) in exchange for employee contributions. Compensation refers to the monetary and nonmonetary consideration employees receive in exchange for the work they perform for an organization Must look at TOTAL compensation not just base pay,Total Compensationin exchange for work,Total Compensation,D

4、irect: Cash,Indirect: Benefits and Services,Relational Forms,Recognition / Status Job security Challenging Work Learning Opportunities Personal Satisfaction Good Culture,Base Pay Incentives Merit / Cost of Living Short Term bonus Long term bonus,Services & Allowances Time away from work,Equity theor

5、y,Outcome (self) Outcome (other) Inputs (self) , or = Inputs (other) O/I (self) other Better performance, feel valued, rationalization to account for overpayment O/I (self) otherrestore equity, seek to increase outcomes, lower inputs Comparisons may be with (a) people inside the firm, (b) outside th

6、e firm, or (c) self (what it should be).,Increase inputs (e.g., time & effort) to justify higher rewards when they feel over-rewarded. Decrease inputs to compensate for lower rewards when they feel under-rewarded. Change the compensation they receive through legal or other actions (e.g., unionizatio

7、n, grievance) Modify their comparisons by choosing another person to compare them-selves against. Distort reality by rationalizing that the inequities are justified. Leave the situation in inequities cannot be resolved.,Consequences of inequity,Internal Alignment,Occurs when each job in a company is

8、 valued appropriately relative to every other job in terms of its ability to help the firm achieve its goals Relative worth hierarchy for determining salaries is established Pay rates are assigned to jobs Process is done through job evaluation approaches: Job ranking Job classification Point factor

9、Factor comparison,Internal Alignment (contd),(1) Job Ranking Reviewing job descriptions and listing jobs in order from highest to lowest worth to company Fairly hard to do in a large company Need to create a framework to process the information found in all the job descriptions Largely subjective,In

10、ternal Alignment (contd),(2) Job Classification Developing broad descriptions for groups of jobs that are similar in terms of tasks, duties, responsibilities and qualifications Wage range is attached to each classification reflecting relative worth of the job in that classification E.g., the federal

11、 governments prefix GS Sometimes managers want to reclassify jobs to give a particular employee a higher salary,Internal Alignment (contd),(3) Point Method Quantitative approach that uses a point value scheme resulting in a score for each job Begins with identifying a set of factors for which the co

12、mpany is willing to pay called “compensable factors Point manual contains description of each factor and what each degree of the factor represents,Internal Alignment (contd),(3) Point method (contd) Represent the range of jobs in the company Scores for these jobs enable company to compare other jobs

13、 to the benchmark jobs and determine which should be paid more or less Job grades are created to reflect hierarchy of jobs within the company,Establishing the INTERNAL Value of Jobs,Recap: Select Compensable factors Dimensions of work that the organization values, that helps it pursue its strategy a

14、nd achieve its objectives. Assign factor weights what is the relative importance of each dimension of job performance? Weights enable companies to allocate more weight to more important compensable factors than other less important compensable factors. Establish degrees of factors present in job sca

15、le the factors to identify the different levels for each compensable factor. Essentially, establishing anchors for different levels on a compensable factor.,Example of Point Values,Example: Point values,Degree/Level Compensable Factor123 45 Job Knowledge50100150200NA Problem Solving50100150200260 Wo

16、rking Condition103050NANA Others In this example: The compensable factors represent the different dimensions of job performance that are important for organizational success,Degree/Level Compensable Factor123 45 Job Knowledge50100150200NA Problem Solving50100150200260 Working Condition103050NANA In

17、this example: The compensable factors represent the different dimensions of job performance that are important for organizational success The degrees reflect the relative level of responsibility, difficulty, etc. associated with each job for each compensable factor.,Degree/Level Compensable Factor12

18、3 45 Job Knowledge50100150200NA Problem Solving50100150200260 Working Condition103050NANA In this example: The compensable factors represent the different dimensions of job performance that are important for organizational success The degrees reflect the relative level of responsibility, difficulty,

19、 etc. associated with each job in terms of each compensable factor. The differences in the numerical values associated with each degree for each compensable factor reflects the weight or relative importance for each factor.,Degree/Level Compensable Factor123 45 Job Knowledge50100150200NA Problem Sol

20、ving50100150200260 Working Condition103050NANA Problem Solving Degree anchor statement Degree 1 actions are performed in a set order according to instruction. Problems referred to a supervisor. Degree 3 Various problems are solved that require general knowledge of company policies and procedures wit

21、hin own area of responsibility Degree 5 - Complex tasks involving new or constantly changing problems or situations are planned, delegated, coordinated, and/or implemented.,Internal Alignment (contd),(4) Factor Comparison Ranking benchmark jobs in relation to each other on factors like mental or phy

22、sical requirements, skill, responsibility, and working conditions Combines job ranking and the point method Monetary rates are included, so as the market changes, it needs to be updated frequently,External Competitiveness,External competitiveness ensures that jobs in the company are valued appropria

23、tely relative to similar jobs in the companys external labor market. Salary Surveys Job Pricing Company Pay Policy Pay Grades and Ranges Broadbanding,Establishing Market Value,Conducting a Survey to assess external market rates Identify Relevant Labor Markets (Ex: relevant labor market for secretary

24、 (local) likely to differ than for engineer (regional) Identify Benchmark Jobs (Key Jobs) The contents are well-known, relatively stable, and agreed upon by the employees involved. The supply and demand for these jobs are relatively stable and not subject to recent shifts They represent the entire j

25、ob structure under study A majority of the workforce is employed in these jobs. Market Survey Data Collection,External Competitiveness (contd),(1) Salary Surveys Provides a systematic way to collect information about wages in the external labor market Companies can conduct their own surveys or purch

26、ase survey data Should look at companies in the same industry and other industries that might be competing with you for employees Should come from appropriate geographic labor market,External Competitiveness (contd),(2) Job Pricing Systematic process of assigning monetary rates to jobs so that inter

27、nal wages are aligned with external wages in the marketplace Begins with plotting results of salary survey for benchmark jobs Market line, also know as wage curve, is drawn to represent relationship between job evaluation points and salaries paid for jobs Plot actual salaries paid for benchmark jobs

28、 and compare them to results from market,Matching external pay and internal job evaluation points for key jobs,120 160 200 240 280 320 360 Job Evaluation points WITHIN Firm,7 6 5 4 3 2 1,Survey Monthly Pay ($000),X,X,X,X,X,X,X,X,X,X = Key benchmark jobs - job evaluation point by salary data point fr

29、om market survey,Matching external pay and internal job evaluation points for key jobs,120 160 200 240 280 320 360 Job Evaluation points WITHIN Firm,7 6 5 4 3 2 1,Survey Monthly Pay ($000),X,X,X,X,X,X,X,X,X,X = Key benchmark jobs - job evaluation point by salary data point from market survey,“Line o

30、f best fit” External Market Policy Line,The Goal What should non-key jobs be paid?,120 160 200 240 280 320 360 Job Evaluation points WITHIN Firm,7 6 5 4 3 2 1,Survey Monthly Pay ($000),X,X,X,X,X,X,X,X,X,O = Non-key benchmark jobs mapping other jobs onto the pay system,“Line of best fit” External Mar

31、ket Policy Line,O,O,O,O,O,O,O,O,Roughly $1800,Roughly $4300,The Reality Where do jobs really fall?,120 160 200 240 280 320 360 Job Evaluation points WITHIN Firm,7 6 5 4 3 2 1,Survey Monthly Pay ($000),X,X,X,X,X,X,X,X,X,O = Non-key benchmark jobs mapping other jobs onto the pay system,“Line of best f

32、it” External Market Policy Line,O,O,O,O,O,O,O,O,O,O,O,O,External Competitiveness (contd),(3) Company Pay Policy If a companys wage curve is below or above the market wage curve, decisions have to be made about whether to move wages or leave them as they are Firms can pay at the market level (follow)

33、, above the market (lead), or below the market (lag) Companies paying below market will have a harder time attracting employees,External Competitiveness (contd),(4) Pay Grades and Pay Ranges Jobs are grouped into job grades associated with a pay range Each range has a midpoint, a minimum, and a maxi

34、mum Midpoints represents an employee who is fully qualified and functioning at an acceptable level of performance Ranges will have overlapthe less overlap the more difference between jobs in each grade,Designing the internal pay structure: Pay Grades,A pay grade is a horizontal group of different jo

35、bs that are considered substantially equal for pay purposes Grades enhance an organizations ability to move people among jobs within a grade with no change in pay. The objective is for all the jobs that are similar for pay purposes to be placed within the same grade.,Pay Ranges,Refer to the vertical

36、 dimension of the pay structure Each pay grade is associated with a pay range consisting of a midpoint and a specific minimum and maximum Midpoints: Correspond to competitive pay policy where the pay policy line crosses each pay grade Are the control points of the range Range spread judgment about h

37、ow the ranges support career paths, promotions, etc. Typically range between 10 and 120%. Minimum of pay range = Midpoint / 1 + (1/2 range spread) Maximum = Minimum + (range of spread * minimum),Setting the pay grade structure,120 160 200 240 280 320 360 Job Evaluation points WITHIN Firm,7 6 5 4 3 2

38、 1,Survey Monthly Pay ($000),Pay Grade,Pay Range,Maximum,Minimum,Mid Point,Differential Ranges,External Competitiveness (contd),(5) Broadbanding Consolidates a large number of pay grades into a few “broad” bands, usually 3 to 10 Maximum pay for a particular band can be as high as 100-400% above the

39、bands minimum pay Bands are usually wide enough that changes in the market dont require adjustments as often,Pay for Individual Performance,Initial pay based on the persons previous experience, education and negotiating skills Increases can be tied to meeting goals, providing higher levels of servic

40、e or results of performance appraisal Red circled job person being paid above the maximum wage for grade Green circled job person being paid below minimum of grade Manager can adjust salary, reclassify or reevaluate the job,External Competitiveness,Ensures jobs are valued appropriately relative to s

41、imilar jobs in the external labor market Affects how attractive the firm is to potential employees Also affects attitude and motivation of current employees,Additional Considerations,Labor Market Conditions Labor demand theories Compensating Differentials work with negative characteristics requires

42、higher pay to attract work Efficiency Wage Theory above market wages will improve efficiency by attracting workers who will perform better and be less willing to leave Signaling pay policies signal kinds of behavior the employer seeks,Additional Considerations,Labor Market Conditions Labor Supply th

43、eories Reservation Wage job seekers wont accept jobs whose pay is below a certain wage, no matter how attractive Human Capital Theory the value of an individuals skills is a function of the time and expense required to acquire them.,Alternative Compensation Approaches,(1) Skill-Based Pay and Knowled

44、ge-Based Pay Require employees to acquire certain skills or knowledge to receive an increase Makes it clear what employees have to do to increase pay May have more employees at higher levels of mastery than needed,Alternative Compensation Approaches (contd),(2) Competency-based Pay Identify the comp

45、etencies (attitudes, behaviors, abilities) employees need to master for pay raises Managers need to outline a valid process to determine achievement of competencies Can lead to higher labor costs or employee frustration if they do not use additional training,Alternative Compensation Approaches (cont

46、d),(3) Direct Market Pricing Collecting salary information from external labor market rather than starting with internal structure based on value of jobs Works well as long as data is accurate,Administering Compensation,Anyone making employee pay decisions needs to receive training How pay rates are

47、 set and raises are determined How frequently they are reviewed What can and cannot be communicated to employees Closed system details about individual pay rates not made public except as required by law (high-ranking executives) Open system pay information is public (school districts with published

48、 pay scales) Communication will enhance employees perceptions of equity and justice,Total Compensation in Practice,Organizational Demands,Environmental Influences,Regulations,Compensation,Strategy & Compensation,Internal value of jobs strategy will determine tasks, duties, and responsibilities a fir

49、m considers most valuable in achieving its goals A firms strategy affects the pay mix (base pay vs. variable pay) Ways to increase employee base pay: Cost-of-living adjustments (COLAs) keep salaries from lagging behind external market and to offset rise in prices of goods and services (uses CPI) Mer

50、it increases salary increase based on how well employee has performed Variable pay includes bonuses, commissions, and stock options,Company Characteristics & Compensation,Small firms may pay less-than-market wages Established firms have more resources to pay at or above market Whether a job is a cor

51、e job or a support position affects pay decisions The size and age of a firm plays a major role in determining the type of pay it offers (e.g., startup firms stock options, older firms more complex pay systems),Company Culture & Compensation,Company culture establishes the priorities for the pay pol

52、icy (i.e., if firm values teamwork, teamwork will be rewarded) Company culture sends an message to the employees about what rewards they can expect to receive Managers need to communicate pay decisions and know what types of rewards are valued by employees,Employee Concerns & Compensation,Equity ver

53、sus Equality Not all jobs require equal knowledge, skills, and abilities or equal levels of responsibility Employees need to understand the process and believe the outcomes of compensation decisions are fair Fairness of Rewards Employees want to understand that both the process and the outcomes are

54、fair Employees perceptions of fairness in compensation is also impacted by relationship with manager Salary compression occurs when pay for jobs in external market rise faster than pay inside the organization (affected by shortage of workers),Labor Force & Compensation,Labor supply when market is ti

55、ght, companies have to pay higher wages to attract and retain employees Labor markets supply and demand have a huge impact on market wages how a firm decides whether to follow, lead, or lag the market Leading the market helps a firm attract more qualified workers A firm may lead the market in certai

56、n critical jobs Pay practices need to match employee pay preferences,Technology & Compensation,Technology enables easier collection of salary data - access or conduct online salary surveys Simplify job evaluation and maintain compensation records Collect timesheets and interface with payroll systems

57、,Globalization,Global organizations have to decide whether they want to centralize or decentralize their compensation systems Global companies with centralized compensation systems are more satisfied Employees see link between results and rewards and more internal and external equity Similarities an

58、d differences in the acceptability of various forms of compensation are found in various countries Laws and norms of countries will affect certain pay practices,Globalization (contd),Paying PCNs (parent country nationals) is most complicated Use balance sheet approach making adjustments for hardship

59、, dangerous, or primitive assignments U.S. companies have been criticized for paying low wages relative to American wages Cost of living and minimum wage laws have to be taken into consideration to do comparison,Ethics and Compensation,“What gets rewarded is what gets done” Sort-term goals that are easily manipulated will tempt employees to engage in unethical behavior Living wage providing a fair wage so that basic living needs can be met Employers must pay the mandated minimum wage Comparable worth eliminating inequity in wages by ensu