Chapter 7 - Recognizing and Rewarding Employees

To employees who were between jobs employees and

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Unformatted text preview: employee applies in performing his/her work and that are the key employee- related levers for achieving results that are relevant to organization’s business strategies o • Broadbanding • Organizations that adopt a skill- based pay system use this to structure their compensation payments to employees • Collapses traditional salary grades into few wide salary bands • Encourages lateral skill building and addresses need to pay employees performing several jobs with different skill- level requirement • Help eliminate obsession with grades and encourage employees to move jobs where they can develop careers and add value to organization • Paying employees through broadbands enables organizations to consider job responsibilities, individual skills and competencies, and career mobility patterns in assigning employees to bands Incentive Plans • • • • • • • Also called variable pay programs – unsure to use in economic downturn Many incentive plans were focusing more on attainment of business unit and group goals instead of focusing on individual achievement Create operating environment that champions a philosophy of shared commitment through belief that every individual contributes to organizational performance and success Linking compensation with organizational objectives is done in belief that employees will assume “ownership” of their jobs o Improve effort and overall job performance Financial incentives offered to improve/maintain high levels of productivity and quality Well- designed plan needed to recognize that person closest to work or customer was in best position to know what needed to be done and how to do it Variety of individual and group incentive plans exist for both hourly and salaried employees and include: o Individual bonus – commonly given to frontline staff o Team or group- based incentive o Merit raises o o o Gainsharing ! plan which both employees and organization share financial gains according to predetermined formula that reflects improved productivity and/or decreased labour costs profit- sharing employee stock ownership plans (ESOPs) ! stock plans in which an organization contributes shares of its stock to an established trust for purpose of stock purchases by its employees Employee Benefits • • • • • • indirect form of compensation intended to improve quality of work and personal lives of employees cost can be as high as 40% when you include premiums for health and welfare, government- mandated coverage, vacation, and paid sick leave employers expect employees to be supportive of organization and be productive benefits now considered rights to which all employees are entitled contributions that benefits will make to compensatio...
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