hr review - Chapter9 - valueaddedcompensation: evaluating...

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Chapter 9  - value added compensation : evaluating the individual components of the compensation program (benefits, base pay, incentives) to see whether they advance the needs of employees and the goals of the organization o managers should ask: “how does this compensation practice benefit the organization” and “does the benefit offset the administrative cost? - Exempt employee : employees not covered by the overtime provisions of the Fair Labor Standards Act; nonexempt employees : employees covered by the provisions of the Fair Labor Standards Act - Consumer Price Index  (CPI): measure of the average change in prices over time in a fixed “market basket” of goods and services. Based on prices of food clothing, shelter, fuels, price of goods needed for day to day living - Escalator clause : clauses in labor agreements that provide for quarterly cost of living adjustments in wages, basing the adjustments on changes in the CPI - Real wages : wage increases larger than rises in the CPI; that is, the real earning power of wages - Point system : a quantitative job evaluation procedure that determines the relative value of the job by the total points assigned to it o Permits jobs to be evaluated on the basis of factors or elements that constitute a job (compensable factors) o Ranking or classifications  - Work valuation:  job evaluation system that seeks to measure a job’s worth through its value to the organization o Can price jobs individually o Serves to direct compensation dollars to the type of work pivotal to organizational goals o Work is measured through standards that come from business goals o Process ends with a work hierarchy that is an array of work by the value to the organization o Work hierarchy is eventually priced through wage surveys to determine individual pay rates - Hay Profile Method : a job evaluation technique using knowledge, mental activity, and accountability to evaluate executive and managerial positions - National Compensation Survey: a statistically valid and compressive compensation program of wage, salary, and benefit information
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o The umbrella program that combines several labor statistic compensation programs into a single vehicle that can produce local and national statistics on levels, trends, and characteristics o Used by managers and compensation specialist to answer: how much must I pay people in certain locations; how have wages changed over the past year?, etc to determine what are prevalent benefits in specific regions o An area based survey - Pay grade : groups of jobs within a particular class that are paid the same rate - Red circle rate : payment rates above the maximum of the pay range - Comparable worth : the concept that male and female jobs are dissimilar, but equal in terms of value or worth to the employer, should be paid the same Chapter 10 - successful incentives plan o employees must have some desire for the plan o employees must be able to see a clear connection between
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This note was uploaded on 10/01/2011 for the course ILRHR 260 at Cornell.

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hr review - Chapter9 - valueaddedcompensation: evaluating...

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