Hlecture11

Hlecture11 - 1 COMPENSATION Professor Bruce Fortado MAN...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1 COMPENSATION Professor Bruce Fortado MAN 4301/6305 University of North Florida Compensation is a major cost, it is critical in attracting and maintaining a good work force, motivation can be enhanced and reinforced, and levels of power and status are conveyed. Internal Equity Comparisons. This refers to two basic things. First, it encompasses organizational comparisons among jobs within the operation to assess their relative worth. Second, it can involve employees selecting an internal figure for comparison (considering both inputs and outcomes) in an effort to show he/she is underpaid. The employee generally selects very favorable people to compare with (large pay gaps). Managers tend to select similarly situated people in an attempt to dissuade the employee. Internal pay comparisons are often more emotional matters than external comparisons, because the personalized nature of the process and the close proximity of the figures. External Equity Comparisons. This refers to looking at the market average for the same position outside of the operation to assess the competitiveness and the relative fairness of current pay levels. Salary Compression . The salary levels of newcomers are too close to those of their more experienced coworkers. For instance, Joe was originally paid $34,000. He has worked hard for the organization for five years and is currently paid $40,000. Jack was just hired for $39,000. This is salary compression. Salary Inversion . The salary levels of newcomers are actually higher than those of their more experienced coworkers. For instance, Joe was originally paid $34,000. He has worked hard for the organization for five years and is currently paid $40,000. Jack was just hired for $42,000. This is salary inversion. Salary Secrecy Policies . Some managers try to avert the aforementioned painful comparisons by having pay secrecy policies (Dessler, 2011: 203). People may face discipline up to and including discharge for violating this policy. Superiors may tell everyone: "This is the best raise I can get you," "You got more than most people," or "Everyone got a similar raise” to circumvent conflict. Of course, people do still talk among themselves (the grapevine). They cannot, however, really confront their boss under this policy. Under conditions of restricted information, people often overestimate the size of peers' raises and underestimate the size of superiors' raises. In short, motivation with pay is normally damaged with pay secrecy. Egalitarian Pay Policies . Where rating inflation prevails, there will not be much difference in individual's raises. In some systems, across the board raises are common. One might also move in lockstep to the top of the grade based on one's seniority rather than merit. All of these egalitarian policies may reduce overt conflicts, but ruin motivation with pay.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 Compensation Methods Rankings . The jobs are ranked from lowest to highest in importance. This is simplest, fastest, and most inexpensive method. How are the rankings and salary gaps justified? This method is generally
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

Hlecture11 - 1 COMPENSATION Professor Bruce Fortado MAN...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online