Mr. Noel Teves
Haycey Oliveros Showbe Enot
Kevin Alfonso Cesar Valencia III (Not Available)
A total amount of the monetary and
non-monetary pay provided to an employee by an employer in return of work performed as required. Pay is a statement of an employee’s worth by an employer. Pay is a perception of worth by an employee.
Wages / Salaries
Time Not Worked
• Vacations • Breaks • Holidays
• Medical • Dental • Life
• Educational assistance • Recreational programs
Strategic Compensation Planning
Strategic Compensation Planning
Links the compensation of employees to the mission,
objectives, philosophies, and culture of the organization. Serves to mesh the monetary payments made to employees with specific functions of the HR program in establishing a pay-for-performance standard. Seeks to motivate employees through compensation.
Value-added Compensation Evaluating the individual components of the
compensation program (pay and benefits) to see if they advance the needs of employees and the goals of the organization.
Common Strategic Compensation Goals:
2. 3. 4.
To reward employees’ past performance
To remain competitive in the labor market To maintain salary equity among employees To mesh employees’ future performance with organizational goals
5. 6. 7.
To control the compensation budget To attract new employees To reduce unnecessary turnover
The standard by which managers tie compensation to
employee effort and performance.
Refers to a wide range of compensation options,
including merit-based pay, bonuses, salary commissions, job and pay banding, team/group incentives, and various gain sharing programs.
Designing a Pay-for-Performance System
How will performance be measured?
How will monies to be allocated for compensation
increases. Which employees will be eligible? How will payouts be made? How often will payouts occur? How large will the payouts be? Will employees perceive the rewards as valued?
Pay Equity (also Distributive Fairness)
An employee’s perception that compensation received is equal
to the value of the work performed. A motivation theory that explains how people respond to situations in which they feel they have received less (or more) than they deserve. Individuals form a ratio of their inputs to outcomes in their job and then
compare the value of that ratio with the value of the ratio for other individuals in similar jobs.
Expectancy Theory and Pay
A theory of motivation that holds that employees
should exert greater work effort if they have reason to expect that it will result in a reward that they value. Employees also must believe that good performance is valued by their employer and will result in their receiving the expected reward.
An organizational policy prohibiting employees from revealing
their compensation information to anyone. Creates misperceptions and distrust of compensation fairness and pay-for-performance standards. Arguments against secrecy: Knowledge of base pay is the strongest predictor of pay satisfaction, which is highly associated with work engagement Knowledge of base pay more strongly predicts pay satisfaction than does the actual amount of pay received by employees.
The Bases for Compensation
Work paid on an hourly basis.
Work paid according to the number of units produced.
Employees whose compensation is computed on the basis of weekly,
biweekly, or monthly pay...