mcgraw-hill © 2005 the mcgraw-hill companies, inc. all rights reserved. 18-1 budgets and...
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McGraw-Hill © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
18-1
Budgets and Administration
Chapter
18
McGraw-Hill © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
18-2
Managing Labor Costs
Controlling Employment: Head Count and Hours
Controlling Direct Compensation Costs
Controlling Indirect Compensation Costs
McGraw-Hill © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
18-3
Exhibit 18.1: Managing Labor Costs
LaborCostsLaborCosts EmploymentEmployment
Average cash compensation
Average benefit cost
+= x
Core
Contingent
Base Pay
Variable Pay
McGraw-Hill © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
18-4
Inherent Controls
Range maximums and minimums
Broad bands
Compa-ratios
Variable pay
Analyzing costs
McGraw-Hill © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
18-5
Why Communicate Pay Information?
Devotion of considerable resources to designing a fair and equitable system intended toMotivate effective performance
Encourage productivity
Misperception of pay system by employees
Openness about pay mayEngender goodwill
Affect perceptions of pay equity