Chapter 11- Compensation1. Equity Theory-A pay fairness theory that states that people form equity beliefs by comparing their outcome/input ratio to that of a referent other.-Relevant to employee compensation- workers compare their pay based on what others get paid. Inequity occurs when a worker feels that he/she worked just as hard as the other person, but earns a lower salary.2.Job Evaluation- A systematic process for determining the worth of a job.Steps: Point-factor method-jobs are evaluated separately on several criteria, called compensable factors. These factors include: Skill/know-how, Knowledge, Effort, Mental Effort, Responsibility, and Working Conditions. Then a point rating scale is used to evaluate physical and mental effort. Then, job evaluators rate each job, one factor at a time. Last, sum all the points earned from each compensable factor. 3.Expectancy Theory-A motivation theory that focuses on the effort-to-performance and performance-to-reward links.
This is the end of the preview.
access the rest of the document.