EXAM 3 final notes.docx - Exhibit 9-10 BARS RATING SCALE is one way to overcome evaluation errors BARS is a performance evaluation technique that

EXAM 3 final notes.docx - Exhibit 9-10 BARS RATING SCALE is...

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Exhibit 9-10 BARS RATING SCALE is one way to overcome evaluation errors, BARS is a performance evaluation technique that relates to employee’s performance to specific job- related incidents. Wages and Salaries Systems: To motivate employees to stimulate employee performance, they should design a merit pay system rather than based on seniority. Pay the high performers more than low performers. They have more talent. What about the other companies who pay their employees in the same position is getting paid higher. Violation of external equity . Compensation manager must constantly balance what is going on outside the company. We will figure ways to get close to a balance between the two. Job-based pay: Linking compensation to the specific tasks a employee performs. Fail to reward the type of learning behavor needed to adapt and survive in turbulent environment with emphasis on employee’s participation and increased responsibility. What is this job worth to the company? How much revenue they bring in or how much cost they minimized? Job is the way to evaluate how much people get paid. Suppose you are in an industry that is so dynamic that it changes . We don’t do construction or those reports anymore. The answer is to look at the employees’ skills . Skill-based pay: Increasingly popular. Employees with higher skill levels receive higher pay than those with lower skill levels. Encourages people to develop their skills and make more valuable to organization. Paying for the employee’s skills. Helped 3 different jobs. Way to compensate people when external environment changes. Competency based pay: Same as Skill-based pay. Compensation Equity: Companies want to strive to maintain a sense of fairness and equity within the pay structure. Two ways to do this: Job Evaluation- Refers to the process of determining the value or worth of jobs within a organization through examination of job content and compare it to similar and dissimilar jobs. Wage and salary surveys show that what other organizations pay incumbents in jobs that match a sample of key jobs selected by the organization. Pay for performance: (Incentive pay) tying at least part of compensation to employee effort and performance through bonuses, incentives, etc. Makes people do the wrong thing like the financial crisis just to gain bonuses. SECTION 9-6b Benefits : Retirement ages is changing. A lot of benefits are determined by laws passed in congress. He remembers his families lies. They talked about the price variation and limitation on butter. Government can tell you how much you can buy at what price and they told companies you can’t pay more than this amount for wages. So how do we attract the people. They ask government to offer benefits like healthcare. *** When companies pay wages and they can deduct that amount from revenue to arrive at taxable income*** We will also allow you to deduct the benefits.
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