Pay strategy new thinking for the new millennium
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Pay strategy new thinking for the new millennium

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Pay strategy new thinking for the new millennium Pay strategy new thinking for the new millennium Presentation Transcript

  • Presented By: Group #2 Members:Syed Awon Hussain Shah 226Bashir Ahmed 211Muhammad Mumtaz 215Muhammad Naeem 216
  • Pay Strategy Support organization’s business strategy AndContribute organizational Effectiveness
  • Changing Environment   Organizations  Business  Individual  Organization Design  Pay system
  • Reasons Pay Practices Hard To ChangePay system Change is ComplexOrganizational Hurdles
  • Disadvantages ofMisaligned Pay Practice   Value  High Cost in Compensation  Inappropriate & Misdirected Behavior
  • Globalization Impact  Moving Products and services across the national boundary in seamless way Greater Competition Quick and Improve Customer Services Advance IT system, Knowledge and Skills are the way to be competitive today.
  • Cont’d  Organizations No Longer Afford Extensive Hierarchies Individuals No Longer have Loyalty Contract
  • Need of Key Skills  • Demand more then Supply • Hot Talent • Negotiation
  • Diversity  Employee from different areas Individual Differences Reward System Teams Collective Response
  • Muhammad Mumtaz 215
  • Pay the person For individual worth (knowledge, skills andcompetencies) rather than for the value of a job theyperform.
  • Cont’d  Pay system based on job and job evaluation Individual had stable duties. Add considerable value due to high knowledge and skills Very dangerous and misleading to pay them according to job worth rather then their individual worth.
  • Job and Job evaluation   Stable duties  Market value of individual  High level of knowledge and skills  Job worth  High level of performance
  • Payment method  According to market value According to knowledge According to skills According to competencies Considering the internal and external market labor into account More emphasize on external
  • Challenge in paying individual   Developing good measure for  Their skills, knowledge and competencies  Measure Use by mostly organization,  Leadership and communication ability  Technical and business knowledge
  • Future perspective   Detailed intranet based description  Knowledge and skills to be effective  Knowledge and skills profile
  • Important objectives  Motivate individual to learn the skills and knowledge Raise the pay of individual to become more valuable Clearly key to developing pay system and retain valuable human capital.
  • Bashir Ahmed 211
  • Reward Excellence Through a pay for performance compensation thatestablishes a clear relationship between a significant amountof pay and attainment of organizational objectives.
  • Cont’d  Important way to attract and retain top performance. potentially powerful motivator. Partial substitute for traditional loyalty employment relationship.
  • Cont’d Traditional Evidence: • Pay cannot be a motivator. • Does not motivate the employees.New Evidence: • Does not support this view. • Significance amount of pay and behavior.
  • Elements of reward  Career Long term development incentive Promotion opportunities Short term incentive Work/life balance Flexible Base salary and work benefitsenvironment
  • Traditional Approach to Pay for performance   Pay on the basis of merit. Disadvantages: • Failure approach • Poor Measure • Small changes in compensation • No motivational impact • Failure to retain high performance.
  • Pay for Performance Plan   Important for organization reward system.  Satisfy needs.  Reflect the Strategy, structure and business process.  Fits the characteristics of organization .
  • Variable Pay Plans  Profit Sharing Stock ownership OrVariable Pay Stock Option Plan Team/Group Incentive
  • Types: PSP  Cash plan Deferred plan Combination plan
  • Seniority-Based pay system   Primarily Encourage individual to stay with the organization  Don’t reward skill development or performance effectiveness.  Don’t motivate individual to improve their skills or perform effectively.  Fails to develop human capital or organization and retaining the most valuable employees.
  • Muhammad Naeem 216
  • Individualizing the pay system  To give employees choices in how they are rewarded and what reward they receive.
  • Cont’d  One-size-fits-all approach Give little choice Homogeneous work force Does not fit a divorce work force
  • One-size-fits-all approach With Diverse Workforce: • Tremendous risk of giving individual reward. • Negative consequences. • Negative for motivation. • Failing to reward with things that they value highly.
  • Characteristic of individual pay system   Attraction  Retention  motivation
  • Reward and organizational culture   Diverse workforce  Similarities and differences among employees.  Homogeneous workforce  Same type of job  Same condition
  • Strategic reward Embrace everything that employees value in theemployment setting.
  • Strategic reward Framework 
  • Alternative  Considerable amount of choice Give option to individualsWork simply for cash, having extensive benefits, or choosethe type of pay for performance system.
  • Advantages  Tailoring rewards to employees preferences Greater Effectiveness Retaining diverse workforce Negative point Create too diverse workforce that wants to establish a strong unified Culture.
  • Cont’d Organizations are, • Moving towards a more diverse workforce. • Becoming more global. • Flexibility and individualizations.
  • Any Question….?
  • Thank you