Compensation薪酬福利管理.pptx

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1、Framework for the Strategic Management of Employees第1页/共57页Strategic Purposes of compensation AttractAttract(the right sort of)people to work for firm RetainRetain(the right sort of)people to work for firm Control CostsControl Costs and Maintain a budget MotivateMotivate exceptional performance Rewa

2、rdReward employees for past performanceReduce unnecessary turnoverturnoverMaintain salary equityequity among employees Also-Reinforces(or conflicts with)the Also-Reinforces(or conflicts with)the attitudes and behaviors encouraged with attitudes and behaviors encouraged with the performance managemen

3、t system.the performance management system.第2页/共57页What is Compensation?To counterbalanceTo make up forTo offset(inducements)in exchange for employee contributions.Compensation refers to the monetary and nonmonetary consideration employees receive in exchange for the work they perform for an organiz

4、ation Must look at TOTAL compensation not just base pay第3页/共57页Total Compensationin exchange for workTotal CompensationDirect:CashIndirect:Benefits and ServicesRelational FormsRecognition/StatusJob securityChallenging WorkLearning OpportunitiesPersonal SatisfactionGood CultureBase PayIncentives Meri

5、t/Cost of Living Short Term bonus Long term bonusServices&AllowancesTime away from work第4页/共57页Equity theoryOutcome(self)Outcome(other)Inputs(self),or=Inputs(other)O/I(self)other Better performance,feel valued,rationalization to account for overpaymentO/I(self)otherrestore equity,seek to increase ou

6、tcomes,lower inputsComparisons may be with(a)people inside the firm,(b)outside the firm,or(c)self(what it should be).第5页/共57页Increase inputs(e.g.,time&effort)to justify higher rewards when they feel over-rewarded.Decrease inputs to compensate for lower rewards when they feel under-rewarded.Change th

7、e compensation they receive through legal or other actions(e.g.,unionization,grievance)Modify their comparisons by choosing another person to compare them-selves against.Distort reality by rationalizing that the inequities are justified.Leave the situation in inequities cannot be resolved.Consequenc

8、es of inequity第6页/共57页Internal Alignment Occurs when each job in a company is valued appropriately relative to every other job in terms of its ability to help the firm achieve its goalsRelative worth hierarchy for determining salaries is established Pay rates are assigned to jobsProcess is done thro

9、ugh job evaluation approaches:Job rankingJob classificationPoint factorFactor comparison第7页/共57页Internal Alignment(contd)(1)Job RankingReviewing job descriptions and listing jobs in order from highest to lowest worth to companyFairly hard to do in a large companyNeed to create a framework to process

10、 the information found in all the job descriptionsLargely subjective第8页/共57页Internal Alignment(contd)(2)Job ClassificationDeveloping broad descriptions for groups of jobs that are similar in terms of tasks,duties,responsibilities and qualificationsWage range is attached to each classification reflec

11、ting relative worth of the job in that classification E.g.,the federal governments prefix GSSometimes managers want to reclassify jobs to give a particular employee a higher salary第9页/共57页Internal Alignment(contd)(3)Point MethodQuantitative approach that uses a point value scheme resulting in a scor

12、e for each jobBegins with identifying a set of factors for which the company is willing to pay called“compensable factors Point manual contains description of each factor and what each degree of the factor represents第10页/共57页Internal Alignment(contd)(3)Point method(contd)Represent the range of jobs

13、in the companyScores for these jobs enable company to compare other jobs to the benchmark jobs and determine which should be paid more or lessJob grades are created to reflect hierarchy of jobs within the company第11页/共57页Establishing the INTERNAL Value of Jobs Recap:Select Compensable factors Dimens

14、ions of work that the organization values,that helps it pursue its strategy and achieve its objectives.Assign factor weights what is the relative importance of each dimension of job performance?Weights enable companies to allocate more weight to more important compensable factors than other less imp

15、ortant compensable factors.Establish degrees of factors present in job scale the factors to identify the different levels for each compensable factor.Essentially,establishing anchors for different levels on a compensable factor.第12页/共57页Example of Point ValuesFactor1st Degree2ndDegree3rdDegree4thDeg

16、ree5thDegreeSkill Job knowledge Experience204060801003545556575Effort Mental demand Physical demand55707580852025303540Responsibility 7085100115130Working conditions3040506070第13页/共57页Example:Point valuesDegree/LevelCompensable Factor 123 45Job Knowledge50100150200NAProblem Solving50100150200260Work

17、ing Condition103050NANAOthersIn this example:The compensable factors represent the different dimensions of job performance that are important for organizational success第14页/共57页Degree/LevelCompensable Factor 123 45Job Knowledge50100150200NAProblem Solving50100150200260Working Condition103050NANAIn t

18、his example:The compensable factors represent the different dimensions of job performance that are important for organizational successThe degrees reflect the relative level of responsibility,difficulty,etc.associated with each job for each compensable factor.第15页/共57页Degree/LevelCompensable Factor

19、123 45Job Knowledge50100150200NAProblem Solving50100150200260Working Condition103050NANAIn this example:The compensable factors represent the different dimensions of job performance that are important for organizational successThe degrees reflect the relative level of responsibility,difficulty,etc.a

20、ssociated with each job in terms of each compensable factor.The differences in the numerical values associated with each degree for each compensable factor reflects the weight or relative importance for each factor.第16页/共57页Degree/LevelCompensable Factor 123 45Job Knowledge50100150200NAProblem Solvi

21、ng50100150200260Working Condition103050NANAProblem Solving Degree anchor statementDegree 1 actions are performed in a set order according to instruction.Problems referred to a supervisor.Degree 3 Various problems are solved that require general knowledge of company policies and procedures within own

22、 area of responsibilityDegree 5-Complex tasks involving new or constantly changing problems or situations are planned,delegated,coordinated,and/or implemented.第17页/共57页Internal Alignment(contd)(4)Factor ComparisonRanking benchmark jobs in relation to each other on factors like mental or physical req

23、uirements,skill,responsibility,and working conditionsCombines job ranking and the point methodMonetary rates are included,so as the market changes,it needs to be updated frequentlyHourly RateSkillRespons.Working ConditionsCarpenter Ast$12.00$7.00$2.00$3.00Carpenter$18.00$10.00$5.00$3.00Supervisor$30

24、.00$15.00$10.00$5.00第18页/共57页External CompetitivenessExternal competitiveness ensures that jobs in the company are valued appropriately relative to similar jobs in the companys external labor market.Salary SurveysJob PricingCompany Pay PolicyPay Grades and RangesBroadbanding第19页/共57页Establishing Mar

25、ket ValueConducting a Survey to assess external market ratesIdentify Relevant Labor Markets(Ex:relevant labor market for secretary(local)likely to differ than for engineer(regional)Identify Benchmark Jobs(Key Jobs)The contents are well-known,relatively stable,and agreed upon by the employees involve

26、d.The supply and demand for these jobs are relatively stable and not subject to recent shiftsThey represent the entire job structure under studyA majority of the workforce is employed in these jobs.Market Survey Data Collection第20页/共57页External Competitiveness(contd)(1)Salary SurveysProvides a syste

27、matic way to collect information about wages in the external labor marketCompanies can conduct their own surveys or purchase survey dataShould look at companies in the same industry and other industries that might be competing with you for employeesShould come from appropriate geographic labor marke

28、t第21页/共57页External Competitiveness(contd)(2)Job Pricing Systematic process of assigning monetary rates to jobs so that internal wages are aligned with external wages in the marketplace Begins with plotting results of salary survey for benchmark jobs Market line,also know as wage curve,is drawn to re

29、present relationship between job evaluation points and salaries paid for jobs Plot actual salaries paid for benchmark jobs and compare them to results from market第22页/共57页Matching external pay and internal job evaluation points for key jobs 120 160 200 240 280 320 360Job Evaluation points WITHIN Fir

30、m 7654321Survey Monthly Pay($000)XXXXXXXXXX=Key benchmark jobs-job evaluation point by salary data point from market survey第23页/共57页Matching external pay and internal job evaluation points for key jobs 120 160 200 240 280 320 360Job Evaluation points WITHIN Firm 7654321Survey Monthly Pay($000)XXXXXX

31、XXXX=Key benchmark jobs-job evaluation point by salary data point from market survey“Line of best fit”External Market Policy Line第24页/共57页The Goal What should non-key jobs be paid?120 160 200 240 280 320 360Job Evaluation points WITHIN Firm 7654321Survey Monthly Pay($000)XXXXXXXXXO=Non-key benchmark

32、 jobs mapping other jobs onto the pay system“Line of best fit”External Market Policy LineOOOOOOOORoughly$1800Roughly$4300第25页/共57页The Reality Where do jobs really fall?120 160 200 240 280 320 360Job Evaluation points WITHIN Firm 7654321Survey Monthly Pay($000)XXXXXXXXXO=Non-key benchmark jobs mappin

33、g other jobs onto the pay system“Line of best fit”External Market Policy LineOOOOOOOOOOOO第26页/共57页External Competitiveness(contd)(3)Company Pay PolicyIf a companys wage curve is below or above the market wage curve,decisions have to be made about whether to move wages or leave them as they areFirms

34、can pay at the market level(follow),above the market(lead),or below the market(lag)Companies paying below market will have a harder time attracting employees第27页/共57页External Competitiveness(contd)(4)Pay Grades and Pay RangesJobs are grouped into job grades associated with a pay rangeEach range has

35、a midpoint,a minimum,and a maximumMidpoints represents an employee who is fully qualified and functioning at an acceptable level of performance Ranges will have overlapthe less overlap the more difference between jobs in each grade第28页/共57页Designing the internal pay structure:Pay GradesA pay grade i

36、s a horizontal group of different jobs that are considered substantially equal for pay purposesGrades enhance an organizations ability to move people among jobs within a grade with no change in pay.The objective is for all the jobs that are similar for paypurposes to be placed within the same grade.

37、第29页/共57页Pay RangesRefer to the vertical dimension of the pay structureEach pay grade is associated with a pay range consisting of a midpoint and a specific minimum and maximumMidpoints:Correspond to competitive pay policy where the pay policy line crosses each pay grade Are the control points of th

38、e rangeRange spread judgment about how the ranges support career paths,promotions,etc.Typically range between 10 and 120%.Minimum of pay range=Midpoint/1+(1/2 range spread)Maximum=Minimum+(range of spread*minimum)第30页/共57页Setting the pay grade structure 120 160 200 240 280 320 360Job Evaluation poin

39、ts WITHIN Firm 7654321Survey Monthly Pay($000)Pay GradePay RangeMaximumMinimumMid Point第31页/共57页Differential Ranges第32页/共57页External Competitiveness(contd)(5)BroadbandingConsolidates a large number of pay grades into a few“broad”bands,usually 3 to 10 Maximum pay for a particular band can be as high

40、as 100-400%above the bands minimum payBands are usually wide enough that changes in the market dont require adjustments as often第33页/共57页Pay for Individual Performance Initial pay based on the persons previous experience,education and negotiating skillsIncreases can be tied to meeting goals,providin

41、g higher levels of service or results of performance appraisalRed circled job person being paid above the maximum wage for gradeGreen circled job person being paid below minimum of gradeManager can adjust salary,reclassify or reevaluate the job第34页/共57页 External CompetitivenessEnsures jobs are value

42、d appropriately relative to similar jobs in the external labor marketAffects how attractive the firm is to potential employeesAlso affects attitude and motivation of current employees第35页/共57页Additional ConsiderationsLabor Market Conditions Labor demand theoriesCompensating Differentials work with n

43、egative characteristics requires higher pay to attract workEfficiency Wage Theory above market wages will improve efficiency by attracting workers who will perform better and be less willing to leaveSignaling pay policies signal kinds of behavior the employer seeks第36页/共57页Additional ConsiderationsL

44、abor Market ConditionsLabor Supply theoriesReservation Wage job seekers wont accept jobs whose pay is below a certain wage,no matter how attractive Human Capital Theory the value of an individuals skills is a function of the time and expense required to acquire them.第37页/共57页Alternative Compensation

45、 Approaches(1)Skill-Based Pay and Knowledge-Based PayRequire employees to acquire certain skills or knowledge to receive an increaseMakes it clear what employees have to do to increase payMay have more employees at higher levels of mastery than needed第38页/共57页Alternative Compensation Approaches(cont

46、d)(2)Competency-based PayIdentify the competencies(attitudes,behaviors,abilities)employees need to master for pay raisesManagers need to outline a valid process to determine achievement of competenciesCan lead to higher labor costs or employee frustration if they do not use additional training第39页/共

47、57页Alternative Compensation Approaches(contd)(3)Direct Market PricingCollecting salary information from external labor market rather than starting with internal structure based on value of jobsWorks well as long as data is accurate第40页/共57页Administering CompensationAnyone making employee pay decisio

48、ns needs to receive trainingHow pay rates are set and raises are determinedHow frequently they are reviewedWhat can and cannot be communicated to employeesClosed system details about individual pay rates not made public except as required by law(high-ranking executives)Open system pay information is

49、 public(school districts with published pay scales)Communication will enhance employees perceptions of equity and justice第41页/共57页Total Compensation in PracticeOrganizational DemandsEnvironmentalInfluencesRegulationsCompensation第42页/共57页Strategy&CompensationInternal value of jobs strategy will deter

50、mine tasks,duties,and responsibilities a firm considers most valuable in achieving its goalsA firms strategy affects the pay mix(base pay vs.variable pay)Ways to increase employee base pay:Cost-of-living adjustments(COLAs)keep salaries from lagging behind external market and to offset rise in prices