Presented By: Group #2 Members:Syed Awon Hussain Shah   226Bashir Ahmed             211Muhammad Mumtaz          215Muhamma...
Pay Strategy            Support organization’s business strategy                 AndContribute organizational Effective...
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...
Globalization Impact            Moving Products and services across the national  boundary in seamless way Greater Comp...
Cont’d                        Organizations No Longer Afford Extensive Hierarchies Individuals No Longer have Loyalty C...
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 theype...
Cont’d                     Pay system based on job and job evaluation Individual had stable duties. Add considerable v...
Job and Job evaluation              Stable duties  Market value of individual  High level of knowledge and skills  Jo...
Payment method          According to market value According to knowledge According to skills According to competencie...
Challenge in paying    individual              Developing good measure for    Their skills, knowledge and competencies ...
Future perspective              Detailed intranet based description   Knowledge and skills to be effective   Knowledge...
Important objectives            Motivate individual to learn the skills and knowledge Raise the pay of individual to be...
Bashir Ahmed       211
Reward Excellence         Through a pay for performance compensation thatestablishes a clear relationship between a signi...
Cont’d                 Important way to attract and retain top performance. potentially powerful motivator. Partial su...
Cont’d                 Traditional Evidence:   • Pay cannot be a motivator.   • Does not motivate the employees.New Evide...
Elements of reward                        Career       Long term          development     incentive        Promotion     ...
Traditional Approach to Pay      for performance                                     Pay on the basis of merit.    Disad...
Pay for Performance Plan                 Important for organization reward system.   Satisfy needs.   Reflect the Stra...
Variable Pay Plans                                   Profit Sharing                                      Stock ownership ...
Types: PSP        Cash plan Deferred plan Combination plan
Seniority-Based pay      system              Primarily Encourage individual to stay with the   organization  Don’t rewa...
Muhammad Naeem   216
Individualizing the pay        system                 To give employees choices in how they are rewarded and   what rewar...
Cont’d              One-size-fits-all approach Give little choice Homogeneous work force Does not fit a divorce work ...
One-size-fits-all  approach         With Diverse Workforce:   •   Tremendous risk of giving individual reward.   •   Nega...
Characteristic of individual pay            system                              Attraction        Retention        mot...
Reward and organizational        culture                          Diverse workforce      Similarities and differences a...
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 exten...
Advantages                Tailoring rewards to employees preferences Greater Effectiveness Retaining diverse workforce...
Cont’d                 Organizations are,   • Moving towards a more diverse workforce.   • Becoming more global.   • Flex...
Any Question….?
Thank you
Pay strategy new thinking for the new millennium
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

  1. 1. Presented By: Group #2 Members:Syed Awon Hussain Shah 226Bashir Ahmed 211Muhammad Mumtaz 215Muhammad Naeem 216
  2. 2. Pay Strategy Support organization’s business strategy AndContribute organizational Effectiveness
  3. 3. Changing Environment   Organizations  Business  Individual  Organization Design  Pay system
  4. 4. Reasons Pay Practices Hard To ChangePay system Change is ComplexOrganizational Hurdles
  5. 5. Disadvantages ofMisaligned Pay Practice   Value  High Cost in Compensation  Inappropriate & Misdirected Behavior
  6. 6. 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.
  7. 7. Cont’d  Organizations No Longer Afford Extensive Hierarchies Individuals No Longer have Loyalty Contract
  8. 8. Need of Key Skills  • Demand more then Supply • Hot Talent • Negotiation
  9. 9. Diversity  Employee from different areas Individual Differences Reward System Teams Collective Response
  10. 10. Muhammad Mumtaz 215
  11. 11. Pay the person For individual worth (knowledge, skills andcompetencies) rather than for the value of a job theyperform.
  12. 12. 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.
  13. 13. Job and Job evaluation   Stable duties  Market value of individual  High level of knowledge and skills  Job worth  High level of performance
  14. 14. 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
  15. 15. 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
  16. 16. Future perspective   Detailed intranet based description  Knowledge and skills to be effective  Knowledge and skills profile
  17. 17. 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.
  18. 18. Bashir Ahmed 211
  19. 19. Reward Excellence Through a pay for performance compensation thatestablishes a clear relationship between a significant amountof pay and attainment of organizational objectives.
  20. 20. Cont’d  Important way to attract and retain top performance. potentially powerful motivator. Partial substitute for traditional loyalty employment relationship.
  21. 21. 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.
  22. 22. Elements of reward  Career Long term development incentive Promotion opportunities Short term incentive Work/life balance Flexible Base salary and work benefitsenvironment
  23. 23. 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.
  24. 24. Pay for Performance Plan   Important for organization reward system.  Satisfy needs.  Reflect the Strategy, structure and business process.  Fits the characteristics of organization .
  25. 25. Variable Pay Plans  Profit Sharing Stock ownership OrVariable Pay Stock Option Plan Team/Group Incentive
  26. 26. Types: PSP  Cash plan Deferred plan Combination plan
  27. 27. 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.
  28. 28. Muhammad Naeem 216
  29. 29. Individualizing the pay system  To give employees choices in how they are rewarded and what reward they receive.
  30. 30. Cont’d  One-size-fits-all approach Give little choice Homogeneous work force Does not fit a divorce work force
  31. 31. 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.
  32. 32. Characteristic of individual pay system   Attraction  Retention  motivation
  33. 33. Reward and organizational culture   Diverse workforce  Similarities and differences among employees.  Homogeneous workforce  Same type of job  Same condition
  34. 34. Strategic reward Embrace everything that employees value in theemployment setting.
  35. 35. Strategic reward Framework 
  36. 36. Alternative  Considerable amount of choice Give option to individualsWork simply for cash, having extensive benefits, or choosethe type of pay for performance system.
  37. 37. 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.
  38. 38. Cont’d Organizations are, • Moving towards a more diverse workforce. • Becoming more global. • Flexibility and individualizations.
  39. 39. Any Question….?
  40. 40. Thank you

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