httpsfitsmallbusiness.comemployee-compensation-planThe pu.docx

https://fitsmallbusiness.com/employee-compensation-plan/
The puzzle of motivation | Dan Pink [Video file]. Retrieved
from https://www.youtube.com/watch?v=rrkrvAUbU9Y
Refining the total rewards package through employee input at
MillerCoors [Video file]. Retrieved from
https://www.youtube.com/watch?v=_I7nv0B4_NU&feature=you
tu.be
How to design an employee compensation plan [SlideShare
slides]. Retrieved from
http://www.slideshare.net/FitSmallBusiness/how-to-design-a-
compensation-plan-dave?ref=http://fitsmallbusiness.com/how-
to-pay-employees/
Compensation strategies [Video file]. Retrieved from
https://youtu.be/U2wjvBigs7w
· Expectations for Power Point Presentations in Units IV and V
I would like to provide information about what needs to be
included in presentations. Please review the rubric prior to
submitting any assignment. If you don't know where to find
this, please contact me.
1. You need a title slide.
2. You need an overview of the presentation slide (slide after
the title slide). This is how you would organize a presentation if
you were presenting it at work.
3. You need a summary slide (before the reference slide); same
reason as above.
4. Please do not forget to cite on slides where you are writing
about something related to what you have read. Please consider
each slide a paragraph. You can cite on the slides or in the
notes. If you do not cite, you will not get credit for the slide.
- Direct quotes should not be used in this presentation as they

are not analysis.
5. Remember, all I can evaluate is what you submit, so please
consider using notes to explain what you are writing in further
detail. Bullets are great and you can use these but then provide
more detail in the notes.
6. Graphics - Please include graphics/charts/graphs as this is
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Reference Guide that was posted in the announcements.
Please never hesitate to email me with any questions. If you
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Assignment 1
Positioning Statement and Motto
Use the provided information, as well as your own research, to
assess one (1) of the stated brands (Tesla, SmoothieKing,
Suave, or Nintendo) by completing the questions below with an
ORIGINAL response to each. At the end of the worksheet, be
sure to develop a new ORIGINAL positioning statement and
motto for the brand you selected. Submit the completed
template in the Week 4 assignment submission link.
Name:
Professor’s Name:
Course Title:
Date:
Company/Brand Selected (Tesla, SmoothieKing, Suave or
Nintendo):

1. Target Customers/Users
Who are the target customers for the company/brand? Make sure
you tell why you selected each item that you did. (NOTE: DO
NOT say “ANY, ALL, EVERYONE” you cannot target
everyone, you must be specific)
Age Bracket: [Insert response]
Gender: [Insert response]
Income Bracket: [Insert response]
Education Level: [Insert response]
Lifestyle: [Insert response]
Psychographics (Interest, Hobbies, Past-times): [Insert
response]
Values (What the customer values overall in life): [Insert
response]
Other items you would segment up on: [Insert response]
How does the company currently reach its customers/users?
What methods and media does the company use to currently
reach the customers/users? What methods and media should the
company use to currently reach the customers/users?
[Insert response]
What would grab the customers/users’ attention? Why do you
think this will capture their attention?
[Insert response]
What do these target customers’ value from the business and its
products? Why do you think they value these items?
[Insert response]
2. Competitors
Who are the brand’s competitors? Provide at least 3 competitors
and tell why you selected each competitor.
Competitor 1: [Insert response]

What product category does the brand fit into? Why have you
placed this brand into the product category that you did?
[Insert response]
What frame of reference (frame of mind) will customers use in
making a choice to use/purchase this brand/service? What other
brands/companies might customers compare this brand to (other
than the top three identified above)?
[Insert response]
3. USP (Unique Selling Proposition) Creation
What is the brand’s uniqueness? Why do you think this is a key
uniqueness for this business?
[Insert response]
What is the competitive advantage of the brand? How is it
different from other competing brands? Why do you consider
this a competitive advantage?
[Insert response]
What attributes or benefits does the brand have that dominate
competitors? Why do you think they dominate?
[Insert response]
How is this brand/company better than its competitors? What is
the brand’s USP (Unique Selling Proposition? Why have you
decided upon this particular USP?
Unique Selling Proposition: [Insert response]
Defense/Justification of USP: [Insert response]
4. Positioning Statement & Motto
Develop a new positioning statement and motto for the brand
you selected. Below is an example of BMW’s positioning
statement and motto. Discuss why you created the items that
you did?

· BMW Positioning statement: The brand for discerning
customers of sports cars (target customers) who want an
exhilarating experience (USP).
· BMW Motto: BMW is the ultimate driving machine.
Newly Created Positioning Statement: [Insert response]
Defense/Justification of Positioning Statement Creation: [Insert
response]
Newly Created Motto: [Insert response]
Defense/ Justification of Motto Creation: [Insert response]
© 2015 Strayer University. All Rights Reserved. This document
contains Strayer University confidential and proprietary
information and may not be copied, further distributed, or
otherwise disclosed in whole or in part, without the expressed
written permission of Strayer University.
MKT 100 Assignment 2 1156 (5-15-2015) Page 3 of 3
55
teaching present-day employees the value of
scientific management
Reginald L. Bell, Ph.D.
R e m n a n t s o f s c i e n t i f i cmanagement endure even
t h o u g h F r e d e r i c k W i n s l o w
Taylor’s essay was first published
in 1911. In many contemporar y
p r o f i t s e e k i n g o r g a n i z a t i o n s a
healthy bottom line depends on
employees’ being machine-like in
certain aspects of the jobs they
do; efficiency is directly related to
profitability. Unfortunately, not
ever y manager understands the

v a l u e o f t i m e a n d m o t i o n i n
relation to what their employees
are doing. In this article, I show
m a n a g e r s h o w t o t e a c h t h e i r
present-day employees the value of
scientific management.
The Legacy of Scientific
Management
Pioneering business philosopher
Frederick Winslow Taylor began
t h i n k i n g a b o u t a n d , m o r e
i m p o r t a n t l y , w r i t i n g d o w n h i s
observations of people working in
e a r l y t w e n t i e t h c e n t u r y
o r g a n i z a t i o n s . S c i e n t i f i c
management was a radically new
idea in the early 1900s. Taylor’s
essay The Principles of Scientific
Management turned 100-years-old
in 2011. Fragments of Taylor’s ideas
s u r v i v e d e s p i t e s c r u t i ny b y
examination and remain relevant to
e ver y d ay b u s i n e s s o p e r a t i o n s .
Taylor, in an edition published by
D ove r P u b l i c a t i o n s i n 19 9 8 ,
argues that:
“We can see and feel the waste of
material things. Awkward, inefficient,
or ill-directed movements of men,
h o wever, l e ave n ot h i n g v i s i b l e o r
t a n g i b l e b e h i n d t h e m . T h e i r
a p p r e c i a t i o n c a l l s f o r a n a c t o f

memory, an effort of the imagination.
And for this reason, even though our
daily loss from this source is greater
than from our waste of material things,
the one has stirred us deeply, while the
other has moved us but little.”
6
In Taylor’s era labor did not
t r u s t m a n a g e m e n t a n d
management did not trust labor.
Despite this drawback, Taylor’s
keen obser vations on the time
and motions it took for workers
to do an operation, his analysis
of work related materials they
used, i.e., optimizing the heads
o f s h o v e l s , l a b o r s ’ w o r k
sequences, and his advocacy for
d i v i s i o n o f l a b o r, c l e a r l y
b e n e f i t t e d , a n d c o n t i n u e s t o
b e n e f i t , e m p l o y e r s a n d
employees. Taylor recorded his
observations and was the first to
begin writing down more efficient
w a y s t o d o o p e r a t i o n s ; h e
f o r m a l i z e d a p r o c e s s f o r
recording the time and motion
i t t o o k t o p e r f o r m j o b s . J o b
analysis and design has its roots
in scientific management and is
now a common human resources
practice in most of the world’s

largest corporations.
For example, when I was a
college undergraduate in 1985, I
worked for a Wendy’s restaurant.
The “crew” was trained to use a
prescribed method of applying
mustard, mayo, and ketchup to
a hamburger with a square patty—
mustard directly on meat patty,
mayo always on top bun and
ketchup always over mayo with
veggies on top. This procedure
w a s t a k e n s o s e r i o u s l y b y
m a n a g e m e n t t h a t w h e n
employees were caught violating
t h e p r o c e d u r e t h e y w e r e
immediately reprimanded; repeat
offenders were often shown the
door. The Wendy’s managers
believed that where sauces were
placed on the hamburger affected
i t s t a s t e ! To t h e m , “ Ta s t e i s
directly related to sales!”
Scientific management is present
w h e n w o r k e r s a s s e m b l e a
McDonald’s hamburger, when
food is ser ved to hungr y Sonic
Restaurant customers by teenagers
wearing roller skates or when a
technical support representative
answers a call in a large call center
t o r e s o l v e a p r o b l e m f r o m a
business customer. The legacy of
scientific management is found
wherever machine-like precision in

a n o p e r a t i o n i s r e q u i r e d t o
improve profitability. Employees
do not automatically understand
w h y b e i n g e f f i c i e n t w h i l e
m a i n t a i n i n g q u a l i t y l e a d s t o
greater profits. And in many cases
neither does their bosses.
Scientific Management to
Secure Prosperity
Taylor was of the frame of mind
that the “principle objective of
m a n a g e m e n t ” i s t o s e c u r e
prosperity for both the employer
and the employee. He believed
that his scientific approach would
e n a b l e b o t h e m p l o y e r a n d
e m p l o y e e t o m a x i m i z e t h e i r
p r o s p e r i t y , c o n t r i b u t i n g t o
g r e a t e r s u r p l u s f o r t h e
o r g a n i z a t i o n . H ow e ve r, t h e
notion owners would share their
surpluses with labor was the most
distrusted part of his scientific
management principles.
Andrea Gabor in her book The
C a p i t a l i s t P h i l o s o p h e r s : T h e
Geniuses of Modern Business -
Their Lives, Times, and Ideas
offers a riveting short biography
of Taylor’s life and work. Gabor
( 2 0 0 0 ) r e f e r s t o d e t r a c t o r s ’
backlash against Taylor’s principles
a s “ Tay l o r i s m ” w h i c h s h e

a t t r i b u t e s a s o n e o f t h e m a i n
c a t a l y s t s s p a r k i n g t h e l a b o r
m o v e m e n t i n A m e r i c a n
manufacturing. When emotions
were at their peak, Taylor needed
armed security to escort him to
and from work; labor believed
Tay l o r ’ s p r i n c i p l e s wo u l d c o s t
t h e m j o b s a n d d e s t r o y t h e i r
livelihoods. Soldiering was a way
l a b o r c o u l d r e d u c e o u t p u t ,
collectively, and thwart Taylor’s
methods.
N e v e r t h e l e s s , s o m e o f t h e
managerial problems then still
r e m a i n . M a n y m a n a g e r s d o n ’ t
k n o w h o w t o t e a c h t h e i r
e m p l o y e e s t h e v a l u e o f d o i n g
specific operations with machine-
like precision. Most minimally-
s k i l l e d e m p l o y e e s w i l l n o t b e
thinking about their time and
motion in relation to the bottom
line unless they are taught. The
best way to demonstrate how to
teach present-day employees to
value scientific management is to
p r e s e n t t h e c a s e o f L o n e l y
Burgers—a fast-food restaurant
franchise whose sales are down.
The Case of Lonely Burgers
Restaurant
Mr. Leroy Williams is the owner
o f a h a m b u r g e r r e s t a u r a n t

franchise. His restaurant is one of
1,000 stores nationally. The total
average gross revenue per franchise
store is $1.5 million annually.
Burgers account for two-thirds of
gross sales and breakfast, desserts,
and beverages account for the rest.
7
Leroy’s store is less than average in
sales; he just cannot figure out why
his sales are slightly under $1.0
million and not $1.5 million, as
compared to the other stores in his
zip code with similar size and
locations. Leroy attended Lonely
Burger University and believes he
s y s t e m a t i c a l l y f o l l o w s a l l t h e
guidelines and rules the franchisor
suggested. Nonetheless, his annual
sales are hurting. He decided to
hire a sales consultant known for
her good work in the industry.
Ms. Jennifer George comes highly
recommended by the president of
High Time Restaurants, Inc., the
parent company. For the first three
days all Jennifer does is watch the
line workers assemble burgers and
takes notes. She is there for all
three shifts because the restaurant
i s o p e n f r o m 6 : 0 0 a . m . u n t i l
11:00 p.m. She carefully listens to

employees working the drive thru
window to gauge that aspect of
t h e i r b e h a v i o r s . O n d ay f o u r,
J e n n i f e r t e l l s L e r o y s h e h a s
completed her work and would
like to have a sit-down to discuss
her findings. Jennifer is not cheap!
In fact, the $20,000 fee for four
days work Leroy hopes is worth it.
Jennifer tells Leroy she has very
good news; she says, “I believe I
know what the problem is and,
m o r e i m p o r t a n t , I h a v e a
solution.” She continues, “ The
main problem is your workers are
unsystematic in how they engage
customers in up-selling when they
complete an order.”
Leroy replies: “Oh, really?”
Jennifer then says, “Yes. What
you probably did not do is to
c a l c u l a t e t h e t r u e c o s t o f t h e
inconsistency in your workers’
habits in not up-selling to each
customer every time—I mean, the
t r u e c o s t i s n o t o n l y y o u a r e
missing a potential new sale but
g u e s t s w i l l b e l e a v i n g t h e
restaurant with your profits still
in their pockets.”
Leroy asks Jennifer, “How much
am I losing, by your estimate?”
J e n n i f e r r e p l i e s , “ I e s t i m a t e
a p p r o x i m a t e l y $ 3 6 5 , 0 0 0 ,
conservatively speaking!”

Lacking feeling in his head by the
news, Leroy asks, “How! And,
Why?”
Jennifer provides a convenient
example to Leroy by saying: “The
p r o b l e m i s y o u r e m p l o y e e s ’
processing food orders do not
follow the Lonely Burgers policy.
THEY ARE NOT ATTEMPTING
TO UP-SALE EACH TIME AND
E V E RY T I M E T H E Y
COMPLETE AN ORDER. Each
time this policy is violated it must
be construed as a lost sale! What’s
worse, your employees don’t seem
to understand why up-selling is
crucial when they complete an
order. Because your employees are
i n c o n s i s t e n t w i t h o f f e r i n g
additional items when closing the
sale, your sales are down by as
m u c h a s $ 3 6 5 , 0 0 0 . W h e n I
m u l t i p l y 3 6 5 d a y s , t i m e s 5 0 0
burgers per day, times an average
of $5.00 per burger, I get gross
revenue of $912,500 annually, just
for burgers. What’s more, when I
calculate minus $2.00 each time
an employee fails to make an up-
sale attempt I calculate $365,000
i n h u n d r e d s o f l o s t s a l e s
opportunities!
Leroy exclaims, loudly, “What can
I do?”
Jennifer tells him, “ Train and

retrain your employees so they will
u n d e r s t a n d t h e i m p o r t a n c e o f
offering additional products to
paying customers each time they
close a sale. This is for the drive
thru as well as for the cashiers
t a k i n g o r d e r s f r o m d i n e - i n
c u s t o m e r s . G e t r i d o f r e p e a t
offenders who don’t seem to care
a b o u t t h e p o l i c y . T h e b i g g e s t
problem is your entire staff lacks a
machine-like precision in taking
o rd e r s t h i s w ay. Yo u l a c k a
scientific management approach in
c r e a t i n g i n c e n t i v e s t h a t w o u l d
assure your employees adhere to the
Lonely Burgers up-sale policy, even
when you are not in the restaurant,
every time they complete an order
t h e y s h o u l d b e u p - s e l l i n g .
O t h e r w i s e , e mp l o ye e s t a k i n g
orders are allowing customers to
l e a v e t h e r e s t a u r a n t w i t h y o u r
profits still in their pockets.”
W i t h i n s i x m o n t h s , L o n e l y
Burgers’ annual sales were projected
to be on par with the national
aver a g e o f $ 1. 5 m i l l i o n . T h e
conversation between Leroy and
J e n n i f e r s h o w s t h a t s c i e n t i f i c
management was a very important
solution for one aspect of the job
L o n e l y B u r g e r e m p l o y e e s d o .
Shown in Figure 1 is what can
occur when employees’ attempt to
up-sale each time, using a scientific

m a n a g e m e n t a p p r o a c h : b e i n g
machine-like in following a ver y
simple sales policy lead to greater
profits. However, when employees
were unsystematic there were fewer
profits and less prosperity for all.
8
Bags of money were literally being
lost. The Lonely Burger employees
did not understand the level of
profits linked to their behaviors
until they were taught to value
these principles.
Concluding Remarks
Even though Taylor’s views are
somewhat dated, there is evidence
t h a t t e a c h i n g e m p l o y e e s t o b e
machine-like in some aspects of
t h e i r j o b s i s a s s o c i a t e d w i t h
i m p r o v e d p r o f i t s . T h i s i s t h e
r e a s o n r e m n a n t s o f s c i e n t i f i c
management endure. Scientific
management was a radically new
i d e a i n t h e e a r l y 19 0 0 s . E ve n
t h o u g h s h i f t s i n m a n a g e m e n t
p e r s p e c t i v e s m a d e “ m a n a s
m a c h i n e ” s o m e w h a t o b s o l e t e ,
present-day employees still need to
adhere to a few of the principles of
scientific management in their daily
operations.

When Leroy’s employees’ began
taking orders with a machine-like
dedication to following the up-sales
policy sales dramatically improved.
L e r o y u s e d a p o r t i o n o f t h e
a d d i t i o n a l p r o f i t s ( s h a r i n g t h e
surplus) to devise special incentives
for employees’ adhering to the up-
s a l e s p o l i c y w i t h m a c h i n e - l i k e
p r e c i s i o n . F u r t h e r m o r e , t h e s e
incentives lead to more prosperity
for the employer and employees.
These basic elements of scientific
m a n a g e m e n t h a v e p r o v i d e d
solutions to business problems for
100 years and will likely endure for
another 100 years, or more.
R e g i n a l d L . B e l l i s a t e n u r e d
associate professor in the college
of business at Prairie View A&M
University. Bell received his Ph.D.
in Business Education from the
U n i v e r s i t y o f M i s s o u r i a t
Columbia. He is an active member
of the Association for Business
Communication, and serves on its
Publications Board. Bell has more
than four dozen articles published
in peer reviewed journals. His
r e s e a r c h h a s a p p e a r e d i n t h e
B u s i n e s s C o m m u n i c a t i o n
Quarterly, Journal of Business and
Leadership: Research, Practice and
Te a c h i n g , J o u r n a l o f C o l l e g e
Teaching and Learning, Academy

o f E d u c a t i o n a l L e a d e r s h i p
Journal, Academy of Marketing
S t u d i e s J o u r n a l , S u p e r v i s i o n
Magazine, Southwestern Business
Administration Journal, and the
J o u r n a l o f L e a d e r s h i p ,
Accountability, and Ethics. Bell,
along with Jeanette S. Martin, is
c o a u t h o r o f “ M a n a g e r i a l
Communication,” a graduate level
t e x t b o o k b y Pe a r s o n H i g h e r
Education, with an “in stock” date
scheduled for January, 2013.
SV
Copyright of Supervision is the property of National Research
Bureau and its content may not
be copied or emailed to multiple sites or posted to a listserv
without the copyright holder's
express written permission. However, users may print,
download, or email articles for
individual use.
MHR 6451, Human Resource Management Methods 1
Course Learning Outcomes for Unit IV
Upon completion of this unit, students should be able to:

6. Appraise the impact of different compensation strategies that
relate to employee motivation.
6.1 Consider compensation strategies currently being utilized.
6.2 Examine motivational factors that are important to today’s
workforce.
6.3 Justify a compensation strategy that supports the
motivational needs of knowledge
workers.
Reading Assignment
In order to access the following resources, click the links
below.
Customize benefits to suit needs of different generations.
(2009). HR Specialist: Compensation & Benefits,
4(5), 4. Retrieved from
https://libraryresources.columbiasouthern.edu/login?url=http://s
earch.ebscohost.com/login.aspx?direc
t=true&db=bth&AN=43315422&site=ehost-live&scope=site
Miller, S. (2016). Talk pays when talking pay. HR Magazine,
61(4), 44-52. Retrieved from

Pink, D. (2009, August 25). The puzzle of motivation | Dan
Pink [Video file]. Retrieved from
https://www.youtube.com/watch?v=rrkrvAUbU9Y
To view the transcript of the video above, click here.
WorldatWorkTV. (2012, July 17). Refining the total rewards
package through employee input at MillerCoors
[Video file]. Retrieved from
tu.be
The following two resources contain the same information. You
have a choice between reading the article or
watching the SlideShare presentation of the information.
Hopkins, C. (2017). How to create a compensation plan in 6
steps. Retrieved from
Waring, D. (2013). How to design an employee compensation
plan [SlideShare slides]. Retrieved from
compensation-plan-
dave?ref=http://fitsmallbusiness.com/how-to-pay-employees/
Unit Lesson

In order to access the following resource, click the link below.
UNIT IV STUDY GUIDE
Appraising Compensation
Strategies
earch.ebscohost.com/login.aspx?direct=true&db=bth&AN=4331
5422&site=ehost-live&scope=site
https://www.youtube.com/watch?v=rrkrvAUbU9Y
https://online.columbiasouthern.edu/bbcswebdav/xid-
71368664_1
tu.be
71368667_1
to-pay-employees/
to-pay-employees/

College of Business – CSU. (2016, September 1). Compensation
strategies [Video file]. Retrieved from
To view the transcripts for this video, click here.
Compensation Strategies: Managing Employee Retention &
Engagement
John Dewey, a famous 20th century American philosopher and
educator, advocated that if one could
establish his or her calling in life and be able to get hold of the
chance to do it, it would be the source of
contentment (Dewey, 1916). This may be the equivalent of the
slogan that is so often used today: Do what
you love; love what you do.
There is a deep wisdom embedded in Dewey’s words that
touches all who seek to discover their own
strengths and find meaning and fulfillment in their work.
Modern-day organizations are making efforts to hold
on to employees who are comfortable being knowledge workers
in careers that are without boundaries,
moving from employer to employer and collecting valuable
skills and competencies that, in turn, enrich and
strengthen their personal brand (Arthur & Rousseau, 1996).
Gone are the days of job security.
Employers realize that keeping good employees is a challenge.
Even in an economy of high unemployment,
there is still attrition. The knowledge workers carry their

expertise with them. They can relocate anywhere,
they love to learn, and they know that the more they share
knowledge, the more they learn; knowledge is the
means of their production. Due to technological advances,
competition for talent is on a global scale. The cost
of recruiting, selecting, training, appraising, and developing
employees has become a huge investment that
now drives the demand for retention and engagement tactics to
be incorporated into compensation strategies
(Drucker, 1999). There is a lot of pressure for an organization
to get their compensation strategy right;
therefore, let’s start the unit with a brief review of the basics of
today’s compensation.
The two main components of compensation are direct and
indirect financial payments. A time-based direct
financial payment is hourly or daily wages paid to production or
clerical workers. Managers are salaried and
are paid annually, monthly, biweekly, or weekly. The other
direct payment options can be performance-based
pay, piece-rate pay for production workers, or commission-
based pay on sales or bonuses. Indirect financial
payments consist of noncash benefits, such as insurance and
vacation paid by the employer (Milkovich,
Newman, & Gerhart, 2014).
As with all strategic plans, compensation rewards must be
aligned with the organization’s strategic
aspirations. Give the employees the compensation necessary for
them to use their knowledge, skills, and
attitudes to excel in their opportunities and to achieve corporate
goals. If an element of inequitable
compensation is in the air, the imbalance affects the employees.
The 2016 Compensation Best Practices
Report tells us that 73% of employers believe that they pay their
workers fairly, while only 36% of employees

agree (as cited in Miller, 2016a). It is critical to design
structures that reward aptitude and results, and it is
even more essential to effectively communicate the solid
compensation philosophy to all employees—
especially to those employees who may perceive there to be
inequality in relation to their associates, industry
peers, or even the tycoons in the executive C-suite who are
shoveling in the money (Miller, 2016a).
Simply sharing the compensation philosophy and educating
employees on procedures establishes open
communication. For instance, explaining the data sets used to
benchmark positions; explaining how you know
the data is current; defining salary structures, such as ranges
and grades; and explaining where employees
are among those ranges are all helpful tactics. Approximately
82% of employees disclosed in the survey that
they would be satisfied, even if their pay was below market
value, if their employer provided open and direct
communication when presenting the reasons. Employers need to
provide management with the tools to have
these conversations or enlist the human resources community in
providing information sessions in the
workforce; each session will prove to be a successful, powerful,
trust-building engagement tool (Miller,
2016a).
Compensation Strategies & Employee Motivation
John Stacey Adams, a behavioral psychologist, created the
equity theory of motivation, which can be applied
to most situations on the job. It argues that wages and
environment are not enough to motivate the workforce.
At the heart of equity theory is perceived fairness. In your Unit
IV Discussion Board video, you will have the
opportunity to observe (if you have not already) the behavior of

capuchin monkeys and their perceptions of
71368663_1
fairness followed by their reactions to those perceptions of
fairness. Once you have viewed this video,
compare your own reactions when faced with perceptions of
unfairness in the workplace: If you compared
yourself to your coworker and saw that she got a grape and you
received a cucumber for doing the same
task, how would you feel? Among humans, the equity theory of
motivation suggests that people are motivated
to sustain equilibrium between what they perceive as their
contributions and rewards. If the person perceives
disequilibrium, a tension will develop that motivates the person
to reduce that tension (“Adams’ Equity
Theory,” n.d.; Milkovich et al., 2014).
A practical example might be if an employee is motivated and
perceives that he is being paid well for his
performance, but he then discovers that everyone in the
department—even those who are underperforming—
receives the same pay due to the performance increase. This
discovery causes a tension or imbalance and
motivates the employee to speak with his supervisor. As a
result, he finds that the supervisor agrees with him
that performance-based pay must be fair and consistent;
therefore, she obtains a promotion for him! He once
again maintains balance. This scenario could also play out as

follows: His supervisor says he has some
excellent points; however, there is nothing she can do. His
tension remains, the employee becomes a toxic
influence on the environment (cucumbers are flying
everywhere), and he decides to leave the organization for
a better opportunity—or he is fired. Let’s hope he gets a
promotion!
Legal Considerations Altering Compensation Strategies
Legal considerations also influence a pay plan’s design. For
example, on May 18, 2016, the Fair Standards
Labor Act (FSLA) that governs minimum wage and overtime
pay made a big change involving overtime pay
(U.S. Department of Labor, n.d.). There is a short video
providing an overview of the new law, and this
website also provides the details and the formula for computing
what employees are exempt from in the
FSLA, especially regarding overtime pay:
U.S. Department of Labor. (n.d.). The overtime rule. Retrieved
from https://www.dol.gov/featured/overtime/
As a result of this change, there may be changes to employee
benefits such as sick time and vacation
accrual, long-term disability, or life insurance. There is no
doubt that many employees will feel they are being
demoted; it may be the first time they will need to punch a time
clock. However, employers and human
resources have known about this change for some time, and
their careful planning and communication can be
used as an opportunity to build trust while educating the
employees on why this change is happening (Miller,
2016b). Please read the article titled “Talk Pays When Talking

Pay,” which is listed in the required reading
section of this unit; it provides guidance for employers when
they are having those pay conversations with
employees.
An employer’s thoughts must be led by regulatory governance
when making compensation decisions. A
review of federal, state, and industry regulations needs to be
considered for any limitations or guidance. Even
when planning compensation restructuring, compensation-
related laws must be considered early on. Below
are some of the laws enforced by the Equal Employment
Opportunity Commission (EEOC) and the U.S.
Department of Labor (DOL), and these must be considered by
employers. These are not required readings for
this unit but are helpful in understanding this topic:
- Wages and the Fair Labor
Standards Act (FLSA)
63 and Lilly Ledbetter Fair Pay Act of
2009
—Equal Employment Opportunity
-Bacon and Related Acts
-O’Hara Service Contract Act (SCA)
Two approaches that employers use for setting pay rates are the
market-competitive pay plan and the job

evaluation method. The purpose of these methods and the steps
involved could be defined for employees to
gain a better understanding and to be better prepared when
changes do occur. For example, ranking, job
classification, point method, and factor comparison could be
explained in the job evaluation method. How
https://www.dol.gov/featured/overtime/
71368665_1
http://www.dol.gov/whd/flsa/
http://www.eeoc.gov/eeoc/publications/brochure-
equal_pay_and_ledbetter_act.cfm
http://www.eeoc.gov/laws/statutes/titlevii.cfm
https://www.dol.gov/ofccp/regs/compliance/ca_11246.htm
http://www.dol.gov/whd/govcontracts/dbra.htm
http://www.dol.gov/whd/govcontracts/sca.htm
http://webapps.dol.gov/elaws/vets/userra/userra.asp
managerial and professional jobs are priced is a separate issue
and does not use job evaluation but, rather,
considers the job’s complexity, the employer’s ability to pay,
and the competition for talent (Miller, 2016b).
The six important topics in contemporary compensation include
the following components: competency-based
pay, broadbanding, talent management, comparable worth,
broad oversight of executive pay, and the concept
of total rewards. Each one of these topics is easily integrated
into a new compensation environment. When an
employer starts paying employees for the competencies that the

job requires rather than paying employees
for the job duties, the employer becomes more attractive to the
knowledge worker. As jobs change due to
new technologies, employees add new skills to their career
toolbox. When positions are eliminated,
employees can easily move into newly created positions based
on their skills and those required of the new
job. Broadbanding provides employees with a wide road to
travel on from job to job, and it facilitates high-
performance management systems that are team- based. Total
rewards packages are being refined even
more by corporations seeking to please employees in different
generational categories. Please read the
article titled “Customize Benefits to Suit Needs of Different
Generations,” and watch the video about what
MillerCoors has done to customize their total rewards package
with input from their employees. (Both
resources are listed in the required reading for this unit.)
Men and women should be paid equally for doing jobs that are
comparable. If there is a gender gap in pay, it
must be seen and addressed. The Dodd-Frank Law of 2010 gives
the board of directors an oversight of
executive pay; they are using advisors and are encouraged to
exercise diligence in creating executive pay
plans. Total rewards now include redesigning more challenging
jobs and recognition programs. Aligning total
rewards (also known as returns) with strategy means that wages,
incentives, and benefits are included into a
compensation package that results in producing employee
behaviors that are required to accomplish the
organization’s competitive strategy (Milkovich et al., 2014).
References

Adams’ equity theory: Balancing employee inputs and outputs.
(n.d.). Retrieved from
https://www.mindtools.com/pages/article/newLDR_96.htm
Arthur, M. B., & Rousseau, D. M. (1996). The boundaryless
career. New York, NY: Oxford Press.
Dewey, J. (1916.). Democracy and education: An introduction
to the philosophy of education. New York, NY:
Macmillan.
Drucker, P. F. (1999). Management challenges for the 21st
century. New York, NY: Harper Business.
Milkovich, G. T., Newman, J. M., & Gerhart, B. (2014).
Compensation (11th ed.). New York, NY: McGraw-
Hill/Irwin.
Miller, S. (2016a). Bridge the ‘comp chasm’ with trust,
transparency: Employers think they pay their workers
fairly; most employees don't agree. Retrieved from
https://www.shrm.org/hrdisciplines/compensation/articles/pages
/bridge-comp-
chasm.aspx#sthash.qiSJRSGe.dpuf
Miller, S. (2016b). How to counter employee perceptions of
income inequality. Retrieved from
https://www.shrm.org/publications/hrmagazine/editorialcontent/
2016/0516/pages/0516-fair-

compensation.aspx#sthash.p2kyztZm.dpuf
U.S. Department of Labor. (n.d.). The overtime rule. Retrieved
from https://www.dol.gov/featured/overtime/
Suggested Reading
In order to access the following resources, click the links
below.
Every person reacts differently to different rewards. This study
looks at the effects of different reward
strategies on multiple generations. It is an interesting read if
you want to learn more about how to motivate
people.
Bussin, M., & van Rooy, D. J. (2014). Total rewards strategy
for a multi-generational workforce in a financial
institution. South African Journal of Human Resource
Management, 12(1), 1-11. Retrieved from
How to motivate people is often studied and hard to achieve.

This video looks at a specific way to view
employees in order to effectively motivate them.
FastCompany. (2010, September 16). Want to motivate people?
Get them out of Maslow’s basement [Video
file]. Retrieved from
https://www.youtube.com/watch?v=LjArLRXMH58&feature=yo
utu.be
To view the transcript for this video, click here.
This article explores the different biases present in university
faculty. These biases can affect the faculty
members’ decision-making processes, possibly resulting in less
ethical decisions.
Medeiros, K. E., Mecca, J. T., Gibson, C., Giorgini, V. D.,
Mumford, M. D., Devenport, L., & Connelly, S.
(2014). Biases in ethical decision making among university
faculty. Accountability in Research:
Policies & Quality Assurance, 21(4), 218-240. Retrieved from
The article below summarizes information found during a study
that examined work and job design. The study
utilized a work design questionnaire, and the authors described
the different factors that played into work
satisfaction, training, and compensation.
Morgeson, F. P., & Humphrey, S.E. (2006). The work design
questionnaire (WDQ): Developing and validating

a comprehensive measure for assessing job design and the
nature of work. Journal of Applied
Psychology, 91(6), 1321-1339. Retrieved from
This video shows an interview with Compensation Manager of
Google John Schirm and Director of
Compensation of Google Marc Shoenen. In the interview, the
two executives discuss how Google handles
compensation issues.
WorldatWorkTV. (2014, October 14). Compensation at Google
[Video file]. Retrieved from
https://youtu.be/MmLCa9QXAlg
To view the transcript for this video, click here.
Learning Activities (Nongraded)
Nongraded Learning Activities are provided to aid students in
their course of study. You do not have to
submit them. If you have questions, contact your instructor for
further guidance and information.
Check for Understanding: Word Search Puzzle
Click here to download a word search puzzle that reinforces the
terms covered in this unit. You can print
it out or use the highlighting or drawing tools to circle the

words directly on the pdf document.
https://www.youtube.com/watch?v=LjArLRXMH58&feature=yo
utu.be
71368649_1
https://youtu.be/MmLCa9QXAlg
71368647_1
71369031_1
4 Compensation & Benefits • May 2009
www.theHRSpecialist.com

STAFF
Vol. 4, No. 5 Printed in the United States.
HR Specialist: Compensation & Benefits (ISSN 1934-1660) is
published monthly by the National
Institute of Business Management LLC, 7600A Leesburg Pike,
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Church, VA 22043-2004, (800) 543-2055,
www.theHRSpecialist.com. Annual subscription price: $192.
© 2009, National Institute of Business Management. All rights
reserved. Duplication in any
form, including photocopying or electronic reproduction,
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and is subject to legal action.
For permission to photocopy or use material electronically from
HR Specialist: Compensation
& Benefits, please visit www.copyright.com or contact the
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This publication is designed to provide accurate and
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Publisher: Phillip Ash
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Production Editor: Nancy Asman
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Editor: John Wilcox,
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Editorial Director: Patrick DiDomenico
Contributors: Sharon O’Malley,
Derek Reveron, Susan Wells
Most organizations choose employeerewards based on budgets,
tradition
and management choices. Or they may
use surveys that solicit preferences but
don’t analyze the results according to
generational differences.
That’s a mistake more organiza-
tions are trying to rectify. Nearly a
third (32%) of HR professionals plan
to alter their total rewards programs
with generational preferences in mind,
according to the new Top Five Total
Rewards Priorities survey by Deloitte
LLP and the International Society of
Certified Employee Benefit Specialists.
That percentage is likely to increase
significantly in the future because the
workforce is becoming more multigen-
erational—especially as older workers
remain longer to rebuild their nest eggs.

More organizations are customizing
rewards programs to accommodate the
values, lifestyles, work habits and in-
terests of different generations. Even
low-budget programs can offer rewards
that appeal to different generations.
Give the people what they want
Here are the different rewards that con-
sultants say best motivate the four gen-
erations:
Millennials were born between
1981 and 1999. They are computer-
literate, easily bored and require fre-
quent challenges. They need work/life
balance and value education.
Millennials value extra break time,
recognition from clients and contribut-
ing to pet causes. This generation also
values gift certificates to music and
video outlets; tickets to concerts and
sporting events; transportation subsi-
dies/reimbursement; iPods and PCs.
Gen X’ers were born between 1965
and 1980. For them, productivity means
working smarter, not longer and harder.
They balance work and personal life
and are self-possessed, versatile em-
ployees. Gen X’ers value flextime,
telework, leading a project team and
recognition from clients. They also
value bonuses based on performance,

weekend trips, tuition reimbursement
and annual salary increases.
Baby boomers were born between
1946 and 1964. Their careers tend to
focus on one organization or industry.
Boomers value recognition such as
employee of the month awards, oral
acknowledgment from clients, parking
passes and promotions.
Boomers also value cash rewards,
bonuses, free day care for a specified
period, training seminars, membership
in a club or organization and dining
with the boss.
Matures were born before 1946.
They are self-starters who have often
sacrificed family time for work and tend
to be loyal employees. They want re-
spect for their experience and sacrifices.
Matures value oral recognition from
bosses and clients, award certificates,
extra time off and serving as mentors
to age-group peers and new employees.
Matures also value salary increases,
401(k) matches, bonuses, profit sharing
and cash rewards for suggestions that
lead to workplace improvement.
Advice: These are generalizations,
so survey your staff to determine what
types of rewards and recognition each

age group values most.
Customize benefits to suit needs of different generationsTotal
rewards
Instant Online HR Answers
14-Day Free Trial
Get FREE access to more than 5,000 HR articles plus
a Free Bonus Report—“10 Employment Laws Every
Manager Should Know.”
You also get:
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and more
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Start your free, no-risk trial today at
www.theHRSpecialist.com/trial.
Case studies:
2 companies that do it right
Prudential benefits support adult
caregivers. After 38% of Prudential Fi-
nancial’s employees identified them-
selves as adult caregivers in a 2004
company survey, the firm ramped up its

elder care benefits. Examples: It subsi-
dizes access to a geriatric care special-
ist, financial advisors, and elder-law
specialists who help workers deal with
aging parents’ issues.
Eli Lilly pays child care costs for
business travelers. Or, if the employee
prefers, the child can go on the trip
—on the company’s dime. The same
goes if an employee has to work un-
scheduled hours. The 10-year-old ben-
efit puts parents and nonparents “on
equal footing in terms of opportunities”
for jobs that require travel, says Carlos
Campoy, director of global workforce
diversity.

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