Compensation & Reward system

2.  Indicate the various factors that influence the
setting of wages
 Differentiate the mechanics of each of the
major job evaluation systems
 Explain the purpose of a wage survey
 Understand the wage curve, pay grades and
rate ranges as parts of the compensation
structure

3.  Base compensation
 Pay incentives
 Indirect compensation/benefits

4.  INTERNALVS EXTERNAL EQUITY
 FIXEDVS.VARIABLE PAY
 PERFORMANCEVS MEMBERSHIP
 JOBVS INDIVIDUAL PAY
 EGALITARIANISMVS ELITISM
 BELOW MARKETVS ABOVE MARKET
COMPENSATION
 MONETARYVS NON MONETARYAWARDS
 OPENVS SECRET PAY
 CENTRALIZATIONVS.DECENTRALIZATION
PAY

5. Internal factors:
 Compensation strategy of the firm
 Worth of the job
 Employee’s relative worth
 Employer’s ability to pay
External factors
 Conditions of the labor market
 Area wage rates
 Cost of living
 Collective bargaining
 Legal requirements

6.  JOB ANALYSIS
 JOB DESCRIPTION
 JOB SPECIFICATION
 IDENTIFY COMPENSABLE FACTORS
 RATEWORTH OF ALL JOBS USING A
PREDETERMINED SYSTEM
 JOB HIERARCHY
 CLASSIFY JOBS BY GRADE LEVELS

7.  CHECK MARKETVALUE USING
BENCHMARK OR KEY JOBS
 ESTABLISH FINAL PAY POLICY
 CRITERIA FOR PAY POSITIONING-
EXPERIENCE
SENIORITY
PERFORMANCE
 INDIVIDUAL PAY

8.  JOB RANKING SYSTEM
 PAIRED COMPARISION
 JOB CLASSIFICATION METHOD
 POINT SYSTEM
 Hay classification

9.  The three universal factors are said to be:
 Know How
 Problem Solving
 Accountability

10. Know How
 Technical Knowledge
 Management Breadth
 Human Relations Skills
Problem Solving
 Thinking Environment
 Accountability
 Freedom to Act
 Magnitude
 Impact
 The power of the Guide Chart lies in the scoring system
and relations of the factors (or the Profile.)

11.  BUREAU OF LABOR STATISTICS
 NATIONALCOMPENSATION SURVEY
 HRIS AND SALARY SURVEYS-
WWW.SALARYSURVEYS.COM
 EMPLOYEE INITIATED SURVEYS.

13.  THE MINIMUMWAGES ACT-1948
 PAYMENT OFWAGES ACT-1936
 THE EQUAL REMUNERATION ACT-1976

14.  PAY COMMISSION
 WAGE BOARDS

15.  BASICWAGE
FAIRWAGES COMMITTEE-1948
INDIAN LABOUR CONFERENCE-1957
THE BASE OFWAGE DIFFERENTIATEARE
GIVEN BELOW-
Interpersonal differentials
Inter occupational differentials
Inter area differentials
Inter firm differentials

16.  REFERSTO COST OF LIVING ALLOWANCE
 FOUR MAJORWAYS
THE CENTRAL DA
THE INDUSTRIAL DA
DOUBLE LINKAGE

17.  THESE BENEFITS ARE DIRECTLY
ADDITIONALTOTHE REGULARWAGES
PAIDTOTHEWORKERS
 ONLYTHOSE BENEFITS FALLWITHINTHE
PURVIEW OF FRINGE BENEFITSWHICH ARE
OR CAN BE EXPRESSED IN CASHTERMS
 FRINGE BENEFITSARE DIFFERENT FROM
WELFARE SERVICES

18.  ISSUE OF EQUAL PAY FOR COMPARABLE
WORTH
 THE ISSUE OFWAGE RATE COMPRESSION
COLA- COST OF LIVINGADJUSTMENT
OASDI-OLDAGE,SURVIVORS,DISABILITY
INSURANCE
SSI-SUPPLEMENTAL SECURITY INCOME
 THE ISSUE OF LOW SALARY BUDGET

19. 1. LABOR RATES AND LABOR COSTSARE
THE SAMETHING-THETWO ARE
DIFFERENT.IT IS PRODUCTIVITYTHAT
MATTERS
2. YOU CAN CUT COSTS BY CUTTING LABOR
RATES- LABOR COSTS ARE A FUNCTION
OF BOTH LABORRATESAND
PRODUCTIVITY

20.  LOW LABOR COSTS ARE POTENT
COMPETITIVE STRATEGY.
 LABOR COSTS ARE A BIG PART OFTOTAL
COSTS
 THE BESTWAYTO MOTIVATE ISTHROUGH
INDIVIDUAL MERIT PAY
 PEOPLEWORK PRIMARILY FOR MONEY