Chapter 7 - Recognizing and Rewarding Employees

Plan which both employees and organization share

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Unformatted text preview: o Labour market = area from which employers obtain certain types of workers o Maintain external equity – pay employee wages equivalent to wages similar employees earn in other establishments Collecting Survey Data • Conduct your own or use “pre- conducted” pay surveys The Wage Curve • • Relationship between the relative worth of jobs and their wage rates can be represented by means of a wage curve Indicates rates currently paid for jobs within an organization o New rates resulting from job evaluation or rates for similar jobs currently paid by other organizations within the labour market Pay Grades • Pay grades – groups of jobs within a particular class that are paid the same rate or rate range o Preferable from administrative standpoint o When job evaluation is used, jobs are grouped into grades as part of the evaluation process o When point and factor comparison systems used, pay grades must be established at selected intervals that represent either point or evaluated monetary value of these jobs Rate Ranges • Common to provide range of rates for each pay grade o Rate ranges may be same for each grade or proportionally greater for each successive grade ! Latter basis provides greater incentive for employees to accept a promotion to a job in a higher grade Other Ways to Determine Wages • • Predominant approach to employee compensation is job- based system o Often fails to reward employees for skills or knowledge they possess or encourage them to learn a new job- related skill o May not reinforce organizational culture stressing employee involvement or provide increased employee flexibility to meet overall production or service requirements Competency- based pay – pay based on how many capabilities employees have or how many jobs they can perform o Encourage employees to earn higher base wages by learning and performing wider variety of skills or displaying an array of competencies that can be applied to a variety of organizational requirements o Represent fundamental change in attitude of management regarding how work should be organized and how employees should be paid for their work efforts Benefits: greater productivity, increased employee learning and commitment to work, improved staffing flexibility to meet production/service demands, and reduced effect of absenteeism and turnover o Also encourages employees to acquire training when new or updated skills are needed o Important to: ! Identify competencies that demonstrably affect performance; ! Devise methods to measure achievement of each competency ! Compensate each competency ! Provide learning opportunities Competency – knowledge, skills, abilities and behaviours that...
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This document was uploaded on 03/28/2014 for the course MOS 1021B at UWO.

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