Compensation And Benefit Chapter 1

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Compensation And Benefit Chapter 1

  1. 1. Compensation And Benefit Chapter 1 A Component Of Human Resource Systems By: Hany E. Guirgis Feb 8, 2007
  2. 2. Agenda <ul><li>What is Compensation? </li></ul><ul><li>Extrinsic Compensation </li></ul><ul><li>Compensation Professionals’ Goal. </li></ul><ul><li>Compensation Department Main Goal. </li></ul>
  3. 3. objectives <ul><li>At the end of this lecture you will be: </li></ul><ul><li>Able to define Compensation </li></ul><ul><li>Generally understand the different types of extrinsic compensation. </li></ul><ul><li>Understand the main goals for Compensation Department. </li></ul>
  4. 4. Defining the Compensation Context <ul><li>What is Compensation? </li></ul><ul><li>Compensation represents both the intrinsic and extrinsic rewards employees receive for performing their jobs. </li></ul>
  5. 5. Defining the Compensation Context (Cont’d) <ul><li>Core compensation </li></ul><ul><li>Hourly wage </li></ul><ul><li>Annual salary </li></ul><ul><li>Adjustments to core compensation </li></ul><ul><li>Cost-of living </li></ul><ul><li>Seniority </li></ul><ul><li>Merit </li></ul><ul><li>Incentive </li></ul><ul><li>Person-focused </li></ul>Total Compensation Extrinsic Compensation Intrinsic Compensation <ul><li>Legally Required Employee Benefits </li></ul><ul><li>Social Security Act </li></ul><ul><li>Workers compensation laws </li></ul><ul><li>Family & Medical leave Act </li></ul><ul><li>Discretionary Employee Benefits </li></ul><ul><li>Health insurance </li></ul><ul><li>Disability insurance </li></ul><ul><li>life insurance </li></ul><ul><li>retirement plans </li></ul><ul><li>paid time-off </li></ul><ul><li>Accommodation and enhancement </li></ul><ul><li>Job characteristics </li></ul><ul><li>Skill variety </li></ul><ul><li>Task identity </li></ul><ul><li>Task significance </li></ul><ul><li>Autonomy </li></ul><ul><li>Feedback </li></ul>
  6. 6. Extrinsic Compensation. <ul><li>Core Compensation </li></ul><ul><ul><li>Salaries (Monthly). </li></ul></ul><ul><ul><li>Wages (Hourly, Daily, or Weekly). </li></ul></ul><ul><li>Cost-of-Leaving Adjustment (COLAs). </li></ul><ul><ul><li>Consumer Price Index (CPI). </li></ul></ul><ul><ul><li>Seniority Pay. </li></ul></ul><ul><ul><li>Merit Pay. </li></ul></ul><ul><ul><li>Incentive Pay. </li></ul></ul><ul><ul><li>Person-focused Pay (Pay-for-Knowledge and Skill-Based Pay). </li></ul></ul>
  7. 7. Extrinsic Compensation (Cont’d) <ul><li>Employee Benefits: </li></ul><ul><ul><li>Legally Required Benefits </li></ul></ul><ul><ul><ul><li>Social Insurance </li></ul></ul></ul><ul><ul><ul><li>Sick leave. </li></ul></ul></ul><ul><ul><li>Discretionary Benefits: </li></ul></ul><ul><ul><ul><li>Health Insurance </li></ul></ul></ul><ul><ul><ul><li>Life Insurance. </li></ul></ul></ul><ul><ul><ul><li>Retirement Plans. </li></ul></ul></ul><ul><ul><ul><li>Paid time-off. </li></ul></ul></ul>
  8. 8. Compensation Professionals’ Goals <ul><li>How HR Professionals fit into the corporate hierarchy. (Line employees and Staff employees). </li></ul><ul><ul><li>Recruitment. </li></ul></ul><ul><ul><li>Performance appraisal. </li></ul></ul><ul><ul><li>Training and Development. </li></ul></ul><ul><ul><li>Employee Relations. </li></ul></ul><ul><ul><li>Employee Termination. </li></ul></ul>
  9. 9. Compensation Professionals’ Goals (Cont’d) <ul><li>How the Compensation Function fits into HR Department: </li></ul><ul><ul><li>Compensation, Recruitment, and Selection. </li></ul></ul><ul><ul><li>Compensation and Performance Appraisal. </li></ul></ul><ul><ul><li>Compensation and Training. </li></ul></ul><ul><ul><li>Compensation and Employee Termination. </li></ul></ul><ul><ul><li>Compensation and Employee Relations. </li></ul></ul>
  10. 10. Compensation Department Main Goal <ul><li>Internal Consistency. </li></ul><ul><ul><li>Job analysis. </li></ul></ul><ul><ul><li>Job evaluation. </li></ul></ul><ul><li>Market Competitiveness. </li></ul><ul><ul><li>Strategic analysis (External market and Internal factors). </li></ul></ul><ul><ul><li>Salary Surveys. </li></ul></ul>
  11. 11. Q & A
  12. 12. Thank you

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