Compensation represents the rewards employees receive for performing their job, are either:

Intrinsic compensation: reflects employees psychological mind-sets that result from performing their jobs.

Organisational development professionals promote intrinsic compensation through effective job design.

Extrinsic compensation: includes monetary and non-monetary rewards.

Skill variety

Task identity

Task significance

Autonomy

Feedback

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Base PayHourly pay Annual salary

Base pay adjustmentsCOLAs Skill-based

payMerit pay Incentive

payPay-for-knowledge Seniority pay

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An employee’s skill level

An employee’s effort

An employee’s level of responsibility

The severity of the working

conditions

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Federal Legislation Designed to: Promote worker safety and health Maintain family income Assist families in crisis Provide assistance in case of

Disability Unemployment

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Three Broad Categories Protection programs

Pay-for-time-not-worked

Services

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W.C. B.C. ServiceBenefit $ / % $ / % $ / %Total 28.02/100 20.41/100 13.09/100

Base Pay 20.57/73.4 14.14/69.3 9.60/73.3

Dscry 5.37/19.6 4.30/21.0 2.29/17.5

LRBs 1.94/6.9 1.95/9.6 1.19/9.1

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TOTAL BASE PAY

DISCRY BENEFIT

LRB

ALL $25.75 $18.07 $5.61 $2.07

MGMT / PROFL $41.91 $30.11 $9.81 $2.79

SALES/OFFICE $19.39 $13.96 $3.86 $1.57

SERVICE $14.26 $10.23 $2.68 $1.35

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Strategic decisions - Guide the activities of companies in the market

Strategic management - Entails judgments that direct a company toward achieving specific goals

Strategic planning - Supports business objectives

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The planned use of company resources

2+ years time span Choices

Lowest cost strategy Differentiation strategy

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Lowest Cost: Focus on being lowest cost

producer/ seller of goods or services Differentiation: Focus on offering

unique goods or services

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Effective when Jobs

Include predictable behaviors

Have a short-term focus

Require autonomous activity

Focus on quantity of output

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Effective when Jobs: Require highly creative behaviors Have a long-term focus Demand cooperation &

independence Involve risk-taking

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Recruitment

Selection

Performance appraisal Training

Career development Labor- management relations Employment termination

Insuring legal compliance

Two Types: Involuntary

Terminated Laid - off

Voluntary Quit Retired

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Income continuity, safety work hours

Pay discrimination

Meeting disabled & family needs

Prevailing wage

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Davis – Bacon Act Fair Labor Standards Act Equal Pay Act Civil Rights Act Pregnancy Discrimination Act Americans with Disabilities Act Family and Medical Leave Act

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Internal consistency

Market competitiveness

Recognizing individual efforts

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Achieved when the value of each job is clearly

defined Represents:

Job structure Hierarchy

Achieved using: Job analysis Job evaluation

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Compensation policies that fit with business

objectives Vital in attracting and retaining

employees

Are based on: Strategic analyses Compensation surveys

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Pay Structures: Pay is determined by employee’s credentials, job knowledge,

and job performance Pay Grades: Based on compensable factors and value Pay Ranges: Builds on grades, uses midpoints, minimums, and maximums

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Individuals or entities directly affected bycompensation practices, like Employees Line managers Executives Unions U.S. government

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