From 1900-1920, pay was primarily based on piecework and cash compensation with little government regulation. From 1920-1930, skill-based pay emerged and the government intervened through New Deal programs. During 1940-1950, wages were frozen to control inflation during World War II while fringe benefits increased. Over the following decades, equal pay acts and other legislation were passed while organizations shifted to merit and market-based pay structures tied to job analysis and performance.

2. 1900 – 1920’s
 Base pay based on piece rate; mainly cash
compensation
 Department of Labor established
 Increased wage standardization resulted in the
beginning of job evaluation and wage structures
 Few companies offered pensions, profit sharing and
guaranteed wages to workers
 Very little government regulation and safety nets

3. 1920’s – 1930’s
 Pay for skill appeared
 Cash compensation was primary form of employee
reward
 Government intervened with a range of social legislation
and public works programs
 Davis Bacon Act (1931) passed: required public
construction project contractors be paid "prevailing
wage"
 Social Security Act of 1935 passed
 National Labor Relations Act of 1935 passed (unions
became stronger and more prevalent)
 Fair Labor Standards Act (1938) passed

4. 1940’s – 1950’s
• Wage system imbedded in regulated
"internal labor markets"
• Wage Stabilization Act; pay levels frozen to
control inflation and boost war production
• "Fringe benefits" were used to lessen the
effects of the freeze
• Individual incentive plans declined; pay
increases became more predictable

5. 1960’s – 1970’s
 1963 Equal Pay Act passed
 Title VII of the Civil Rights Act of 1964 passed
 Merit increase grids, seniority-based
increases, cost-of-living adjustment (COLA)
clauses, career progressions and ladders
supporting detailed job analysis and job
evaluation
 A greater emphasis on the external market

6. 1980’s – 1990’s
 Greater emphasis on individual performance and
results, group incentives and team-based pay
 Compensation decisions aligned with the business
strategy and reward valued employee behaviors
 Use of broad banding pay grades increased
 Teamwork and success sharing
 Individualized variable pay based on performance
 More strategic pay decisions
 Intense competition for highly skilled workers

7. 1990’s – 2000
 Great economic expansion
 Intense competition for highly mobile skilled work
force created stronger emphasis on
attraction/retention of key employees
 Increased use of broad-based equity programs,
profit-sharing and pay for performance
 Governmental regulations such as the Americans
with Disabilities Act of 1990 (ADA) and the Family
and Medical Leave Act of 1993 (FMLA)

8. 2000 – Present
 Pay for performance reward systems linking
performance to compensation prevalent
 The increase of cross-training and multi-tasking
which challenges organizations to customize
compensation approaches
 Continued popularity of equity plans
 A new look at stock plans
 Total rewards approach allows companies to better
compete for talent and resources by viewing the
employer/employee relationship holistically as a
strategic advantage