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Chap001 Narrative Slides
Chap001 Narrative Slides
Chap001 Narrative Slides
Chap001 Narrative Slides
Chap001 Narrative Slides
Chap001 Narrative Slides
Chap001 Narrative Slides
Chap001 Narrative Slides
Chap001 Narrative Slides
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Chap001 Narrative Slides

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Transcript

  • 1. Chapter 1 The Pay Model
  • 2. Contrasting Perspectives of Compensation Society’s Views Stockholders’ Views Employees’ Views Managers’ Views
  • 3. Compensation: Definition
    • Society
      • Pay as a measure of justice
      • Benefits as a reflection of justice in society
      • Job losses (or gains) attributed to differences in compensation
      • Belief that pay increases lead to price increases
  • 4. Compensation: Definition (cont.)
    • Stockholders
      • Using stock to pay employees creates a sense of ownership
      • Linking executive pay to company performance supposedly increases stockholders' returns
    • Managers
      • A major expense
      • Used to influence employee behaviors and to improve the organization's performance
  • 5. Compensation: Definition (cont.)
    • Employees
      • Major source of financial security
      • Return in an exchange between employer and themselves
      • Entitlement for being an employee of the company
      • Reward for a job well done
    • Global Views – Vive la diff é rence
      • China: Traditional meaning of compensation providing necessities of life replaced with dai yu
      • Japan: Traditional word kyuyo replaced with hou-syu; very recently the phrase used is teate
  • 6. What Is Compensation? Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship
  • 7. Forms Of Pay
    • Relational returns
      • Psychological in nature
    • Total compensation
      • Cash Compensation/ transactional
        • Base wages
          • Difference between wage and salary
        • Merit pay/cost-of-living adjustments
          • Merit increases – given in recognition of past work behavior
          • Cost-of-living adjustments –same increases to everyone, regardless of performance
  • 8. A Pay Model
    • Three basic building blocks:
      • Compensation objectives
      • Policies that form the foundation of the compensation system
      • Techniques that make up the compensation system
  • 9. Exhibit 1.5: The Pay Model

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