Compensating Employee
1 Compensating Employee
Main points *Compensation and compensation management Principles of compensation management Methods and Process of designing compensation Trends of compensation
2 Main points ❖ Compensation and compensation management ❖ Principles of compensation management ❖ Methods and Process of designing compensation ❖ Trends of compensation
Compensation Non-monetary rewards Monetary compensation Direct compensation Career rewards Basic salary Social rewards Incentives Indirect compensation Public protection Private protection Paid leave Life-cycle benefits
3 Non-monetary rewards Career rewards Social rewards Monetary compensation Direct compensation Basic salary Incentives Indirect compensation Public protection Private protection Paid leave Life-cycle benefits Compensation
1.Non-Monetary Rewards 1)Career rewards Security Self-development Career flexibility Opportunity for growth in income How many career rewards in a company?
4 1.Non-Monetary Rewards 1) Career rewards Security Self-development Career flexibility Opportunity for growth in income How many career rewards in a company？ Compensation Management
1.Non-Monetary Rewards 2)Social Rewards Status symbols Praise and recognition Task enjoyment Friendship How many social rewards in a company? 5
5 2) Social Rewards Status symbols Praise and recognition Task enjoyment Friendship How many social rewards in a company？ Compensation Management 1.Non-Monetary Rewards
2.Monetary Compensation A.Direct Compensation 1)Salary (Regular pay) (a)Basic Salary (Including Shift Pay and Premium Pay) (b)Competency-&Skill-Based Pay (P193)
6 2.Monetary Compensation A. Direct Compensation 1）Salary (Regular pay) (a) Basic Salary (Including Shift Pay and Premium Pay) (b) Competency- & Skill-Based Pay Compensation Management (P193)
Job-Based vs.Skill-Based Pay Pay for tasks of a single job Job- Based Pay for job,not person Pay Bureaucracy,routine √ technology,stable conditions
7 Job-Based vs. Skill-Based Pay JobBased Pay ✓Pay for tasks of a single job ✓Pay for job, not person ✓Bureaucracy, routine technology, stable conditions
Job-Based vs.Skill-Based Pay Pay for skills that can be used for many tasks across multiple Skill- jobs Based Pay Pay for skills,not jobs Flatter structure,decentralized, self-managed work teams, workplace flexibility
8 Job-Based vs. Skill-Based Pay SkillBased Pay Pay for skills that can be used for many tasks across multiple jobs Pay for skills, not jobs Flatter structure, decentralized, self-managed work teams, workplace flexibility
Implementing a Skill-Based Pay System Identify needed tasks. Determine needed skills. Develop skill tests/measures. *Price each skill. Communicate plan to employees
9 Implementing a Skill-Based Pay System ❖ Identify needed tasks. ❖ Determine needed skills. ❖ Develop skill tests/measures. ❖ Price each skill. ❖ Communicate plan to employees
Skill-Based Pay Plans Weaknesses Strengths Adds to labor costs Incentive to improve skills May lead to inequity Improved perceptions employee Not cost effective if competence skills are not used Staffing flexibility Problems Employees see determining skill “big picture'' differences among employees 10
10 Skill-Based Pay Plans Strengths ❖ Incentive to improve skills ❖ Improved employee competence ❖ Staffing flexibility ❖ Employees see “big picture” Weaknesses ❖ Adds to labor costs ❖ May lead to inequity perceptions ❖ Not cost effective if skills are not used ❖ Problems determining skill differences among employees