MHR 701--Compensation and Benefits

MHR 701--Compensation and Benefits - Compensation and...

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Compensation and Benefits MHR 701 Dr. Larry Inks Department of Management and Human Resources Fisher College of Business The Ohio State University
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2 Linkage to Earlier Class Topics Compensation Terms Different Types of Compensation Approaches - The “Balanced Scorecard” Approach Different Types of Benefits (legally required, etc.) Summary Thoughts Overview
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3 Compensation and Performance Management Merit increase Bonus (variable comp) Profit sharing Equity (options) etc. Orientation/ Onboarding Selection Human Resource Planning Performance Review Developmental Review Setting Accountabilities Rewards (Merit increase, etc.)
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4 Compensation Directly relates to an organization’s ability to attract, select and hire the best possible employees/organization members Is strongly related to individual motivation, satisfaction, engagement and retention Can cause internal conflicts (e.g., team effectiveness) when equity is not perceived to be present Needs to be aligned with the goals and strategy of the organization - Different elements of compensation plan (merit vs. bonus, etc.) - Focus for compensation (individual vs. group vs. organization level) Can present difficulties in global organization management Linkage to Earlier Class Topics In the U.S., compensation is intensely personal and related to self-worth
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5 Compensation The rewards, usually monetary in nature (either short- and/or long-term) that reinforce behavior, organizational membership, performance and retention. Important Terms/Concepts Intrinsic vs. extrinsic rewards • Government regulations (FLSA, Equal Pay Act of 1963, etc.) • Different types of compensation (e.g., merit pay, incentive pay, etc.) • Determining wage structures, grades vs. bands, etc. Individual- vs. team- vs. organization-level incentives Benchmarking Total compensation (vs. total rewards) Compensation Terms/Concepts
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6 Different Types of Employee Compensation Merit pay Incentive pay (variable pay as primary or secondary source of income) Senior-level compensation (deferred compensation, etc.) Ownership (aka “equity”) - Traditional stock option plans (usually at higher levels) - Employee Stock Ownership Plans (ESOPs) • Profit sharing • Skill-based pay
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7 Merit-Based Compensation • Merit pay programs link performance-appraisal ratings to annual pay increases. • A merit increase grid combines an employee’s performance rating with the employee’s position in a pay range (often called a “comp- ratio” to determine the size and frequency of his or her pay increase. Merit increase grids can also help bring about perceived pay equity. Some organizations provide guidelines regarding the percentage of
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This note was uploaded on 02/23/2012 for the course BUSMHR 701 taught by Professor Inks during the Summer '11 term at Ohio State.

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MHR 701--Compensation and Benefits - Compensation and...

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