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MGT 303 pay structure

MGT 303 pay structure - Chapter 11-Pay Structure Decision...

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Chapter 11 -Pay Structure Decision Wednesday, April 13, 2011 3:27 PM Introduction a. Employer's view i. Pay is critical in attaining strategic goals ii. Pay impacts employee attitudes and behaviors iii. Employee compensation is significant organizational cost a. Employee's view i. Policies having to do with wages, salaries, and other earnings affect their overall income and thus their standard of living ii. Both level of pay and fairness compared with others' pay are important a. Organizations have discretion in deciding how to pay b. Each employee's pay is based upon individual performance, profits, seniority, or other factors c. Regardless of cost differences, different pay programs can have different consequences for productivity and return on investment Developing pay levels -Market pressures a. Product-market competition -challenge to sell goods and services at a quantity and price that will bring a return on investment b. Labor-market competition -among an organization must pay to compete against other organizations that hire similar employees Employees are a "Resource" -a philosophy that considers employees to be an investment that will yield valuable returns a. Controlling cost through noncompetitive pay can result in low employee productivity and quality b. Pay policies and programs are important HR tools for encouraging desired employee behaviors Developing a pay structure -3 approaches a.
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