Employee Compensation - Short version

Employee Compensation - Short version - Motivating...

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Motivating Employees Through Compensation Part I – Comp. Background & Establishing a Basic Pay Structure
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HRM – The Big Picture S t r a e g y L l I s u
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Focus of this Section Understanding the basics of how compensation systems are set up Strategic considerations Legal issues Strategies for setting up base pay Understand how base pay is altered Making adjustments based on employee performance and contributions
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Employee Compensation Paying and rewarding employees for their contributions to the organization Base pay & adjustments based on performance Benefits/Insurance Time off Retirement savings Critical component of attracting and
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Strategic Compensation
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Pay Structure in Organizations Pay structure The relative pay of different jobs and how much they are paid Also may include pay ranges (min & max) Assumption: Wages impact motivation and productivity 2 components of pay structure: A. Job structure
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Factors Influencing Pay Structure 1. Legal issues with pay 2. Employee judgments about pay fairness 3. Economic influences on pay
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Legal Issues With Pay Title VII /Equal Employment Opportunity Prohibits discrimination in pay based on protected group status (race, gender, age, etc.) unless justified by business necessity Equal Pay Act (1963): Comparable pay for comparable work Gender and race disparity exists today. Is this discrimination? Fair Labor Standards Act (1938) Executives, professional workers, sales, and some other occupations considered to be exempt from FLSA Exemptions based on a number of criteria # of people supervised, job responsibilities, salary, Requires overtime pay over 40 hours for nonexempt workers
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Highest: 1. Washington: $8.55 2. Oregon: $8.40 3. Vermont: $8.06 NJ: $7.25 Minimum Wage
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Fairness in Pay Structures Perceptions of fairness important for satisfaction, motivation, and retention Equity Theory Assumes workers compare their pay situations to others Co-workers, self at a previous job, workers in other organizations, etc. Perceptions of Outcome / Input ratio for self and others OSELF / ISELF VS. OOTHER / IOTHER Equity = distributive justice
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Resolving Inequity Us: Inputs = 10, Outcomes = 10 Other: Inputs = 5, Outcomes = 10 Inequity: 10 vs. 10 10 5 Why is this unfair?
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This note was uploaded on 02/26/2012 for the course MGT 310 taught by Professor Donovan during the Fall '11 term at Rider.

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Employee Compensation - Short version - Motivating...

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