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Chapter 13Chapter 13
Rewards and Compensation
Copyright © 1999 John Wiley & Sons Canada, Ltd. All rights reserved.
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Rewards and Rewards and the Link to Motivationthe Link to Motivation
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Types of Types of Organizational IncentivesOrganizational Incentives
• Intrinsic vs. extrinsic
• Financial vs. non-financial
• Performance-based vs. membership-based
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Structure of RewardsStructure of Rewards
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Compensation ManagementCompensation Management
• Process of managing compensation program to attract, motivate, and retain talented employees
• Job evaluationJob evaluation determines relative value of jobs in organization
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Government Influence Government Influence on Compensationon Compensation
• Overtime pay
• Minimum wage
• Equal pay legislation
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Job Evaluation Job Evaluation and the Pay Structureand the Pay Structure
Sample job evaluation criteria:
• Mental requirements
• Level of supervision
• Complexity
• Physical demands
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Methods of Job EvaluationMethods of Job Evaluation
• Ranking method
• Classification method
• Factor comparison method
• Point method
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Excerpts from a Point MethodExcerpts from a Point Method
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Establishing a Pay StructureEstablishing a Pay Structure
• Wage and salary surveys
• Wage curves
• Wage structure
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
A Wage CurveA Wage Curve
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
A Wage StructureA Wage Structure
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Incentive Compensation Plans: Incentive Compensation Plans: Individual IncentivesIndividual Incentives
• Merit pay
• Piecework plans
• Time-saving bonuses
• Commissions
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
• Gainsharing
• Scanlon Plan
• IMPROSHARE
Incentive Compensation Plans: Incentive Compensation Plans: Group IncentivesGroup Incentives
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Competency-Based CompensationCompetency-Based Compensation
• Individuals are rewarded for skills, knowledge and behaviours
• Broad-banding:Broad-banding: ties pay to competencies and contribution to the organization
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Team-Based CompensationTeam-Based Compensation
• Encourage work teams to exceed established goals
• Success depends on clarity of purpose and goals, availability of resources, effective communication and trust
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
Executive Compensation ProgramsExecutive Compensation Programs
• Salaries
• Supplemental financial compensation (bonuses, stock options)
• Supplemental non-financial compensation (perquisites)
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HUMAN RESOURCES MANAGEMENTTempler • Cattaneo • De Cenzo • RobbinsTempler • Cattaneo • De Cenzo • Robbins
John Wiley & Sons Canada, Ltd
International CompensationInternational Compensation
• Base pay
• Differentials
• Incentives
• Assistance programs