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ch9 - I SUMMARY Employee compensation if properly...

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Unformatted text preview: I SUMMARY Employee compensation, if properly administered, canbe anellective tool to improve employee performance, motivation, and satisfaction Mismanaged pay programs canlead to high turnover and absenteeism, more grievanoes, poor performance, andjobldissatisfaction. For compensation to be appropriate, it must be internally and externally equitable. Through job evaluation technicpaes, the relative worth ofjobs is determined. This assures intemal equity. Wage and salary surveys are used to determine external equity. With knowledge of the relative worth ofjobs and external pay levels, eachjob can be properly priced. The process of wage and salary administration is affected by several challenges, including union power, the productivity of workers, the company‘s compensation policies, and government constraints on pay. The Canada Labour Code is the major federal law affecting compensation man- agement, regulating minimum wages, overtime, and child labour. The Canadian Human Rights riot seal-ts to eliminate sea-based pay differentials. All provinces have similar laws—labour codes and human rights legislation—for their jurisdictions. {A good example of govemment constraints on pay is wage and price controls. in 19E, the federal government introduced such a program to fight inflation. Pay and price increases were limited to a certain percentage and were controlled by an anti-inflation board. The program was abolished in 1975.)“ Pay equity has become a major issue in the past few years. Killian the Canadian Human Rights Act was passed in 19W. it introduced the new concept of “equal pay for work of equal value." which requires employers to compare the content of jobs when determining pay scales and to pay equal wages for jobs of comparable value. The Canadian Human Rights Commission specifies four criteria by which jobs can be evaluated: skill. effort. responsibility. and working conditions. Provincial equal pay legislation is usually modelled after the federal law. Financial incentives are another dimension of compensation management. individual incentives attempt to relate pay to productivity rGroup plans have the same objectives, but the relationship is often not as direct or obvious to workers. Some approaches pay a bonus for reaching a production target, others share the company’s profits with workers, and still others share savings in labour costs. The human resource function is directly and indirectly involved with employee motivation and job satisfaction. Humanresource policies and programs have a major effect on organizational motivation. Compensation consists of more than wages, salaries, and bonuses. Remuneration includes an ever—growing list of fringe benefits and services. Although these benefits are referred to as “noncash compensation,” they are a significant part of the total labour cost of most employers. The next chapter describes the range ofbenefits and services offered by employers. ...
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