assignment--1
1. How do differing perspectives (society, managers and employees) affect the views of compensation?
Answer: There are basically four perspectives in views of compensation. These are as follows:
Society’s View:
• Pay works as a measure of justice.
• Benefits acts as a reflection of justice is society.
• Gain or loss jobs attributed to differences in compensation.
• Pay increase lead to price increase.
Stockholder’s view:
• Giving stock as a means of pay to employees creates sense of ownership.
• Links between executive pay to company’s performance supposedly increases stockholder’s returns.
Manager’s View:
• Major expense.
• Increase employee behaviors and improve organization’s performance.
Employee’s view:
• Source of great financial security.
• Return in an exchange between employer and themselves.
• Rewarding employees as job well done.
• Act as being an employee of the company.
2. Explain the difference between base pay and performance pay.
Answer:
Base Pay: Base pay generally describes the minimum compensation that an employee can expect from his job. It can express in terms of hourly rate or it could be in a number of other different forms. In salary basis, base pay could be expressed as a monthly salary such as $5000 per month or $60000 per year.
Performance pay: Performance pay reward employees for their great performance at their job. It is easy to quantify but not all the time. For example, a business dealership can act as a reward for an employee who perform consistently excellent and fulfill sales target. Companies also try to improve in less quantifiable job like teamwork. In that case, the incentive would be tied up with the supervisor’s subjective rating of employee’s performance at a scheduled review. Achieving higher rating allow employees to receive more incentive pay. Most incentive plans that provide financial rewards for performance are pay for performance plans but not all of them because some are merit pay plans.
Answer: There are basically four perspectives in views of compensation. These are as follows:
Society’s View:
• Pay works as a measure of justice.
• Benefits acts as a reflection of justice is society.
• Gain or loss jobs attributed to differences in compensation.
• Pay increase lead to price increase.
Stockholder’s view:
• Giving stock as a means of pay to employees creates sense of ownership.
• Links between executive pay to company’s performance supposedly increases stockholder’s returns.
Manager’s View:
• Major expense.
• Increase employee behaviors and improve organization’s performance.
Employee’s view:
• Source of great financial security.
• Return in an exchange between employer and themselves.
• Rewarding employees as job well done.
• Act as being an employee of the company.
2. Explain the difference between base pay and performance pay.
Answer:
Base Pay: Base pay generally describes the minimum compensation that an employee can expect from his job. It can express in terms of hourly rate or it could be in a number of other different forms. In salary basis, base pay could be expressed as a monthly salary such as $5000 per month or $60000 per year.
Performance pay: Performance pay reward employees for their great performance at their job. It is easy to quantify but not all the time. For example, a business dealership can act as a reward for an employee who perform consistently excellent and fulfill sales target. Companies also try to improve in less quantifiable job like teamwork. In that case, the incentive would be tied up with the supervisor’s subjective rating of employee’s performance at a scheduled review. Achieving higher rating allow employees to receive more incentive pay. Most incentive plans that provide financial rewards for performance are pay for performance plans but not all of them because some are merit pay plans.