Week10 - Week 10 Prescribed reading Dessler et al(2002...

12-1
BUS 381
Compensation
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Week 10

Prescribed reading: Dessler et al (2002), Chapter 12
Learning Objectives

Discuss different types of rewards (financial and
nonfinancial)
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Discuss the key factors in determining pay rates

Explain how organizations establish pay rates

Describe skill/competency-based pay

Discuss compensation for professionals and
managers

Discuss gender differences in pay

12-2
Basic Considerations in
Determining Pay Rates
Legal Standards
Union
Compensation policies
Equity

12-3
Establishing Pay Rates
Step 1. Conduct job evaluation – for internal equity
Step 2. Group similar jobs into pay grades
Step 3. Conduct salary survey – for external equity
Step 4. Price each pay grade using wage curves
Step 5. Fine-tune pay rates

12-4
Job Evaluation
The formal and systematic comparison of
jobs to determine their relative worth
Benchmark Job
-job commonly found in organizations
-critical to firm’s operations
Compensable Factor
-fundamental compensable aspect of a job
eg. skill, effort, responsibility, working conditions