Compensation Management
Chapter # 1
Key Terms:
ALLOWANCES~ Compensation to provide for items that are in short supply
COMPENSATION~ All forms of financial returns and tangible services and benefits that employees receive as part of an employment relationship
COST-OF-LIVING ADJUSTMENT~ Percentage increment to base pay provided to all adjustments employees regardless of performance
EXTERNAL COMPETITIVENESS~ Comparison of compensation with that of competitors
INCENTIVES (variable pay)~ Onetime payments for meeting pre-established performance objectives in a future time period.
INTERNAL ALGINMENT~ Pay comparisons between jobs or skill levels inside alignment a single organization
MERIT INCREASE~ Increment to base pay in recognition of past work behavior
RELATIONSHIP RETURNS~ Psychological returns employees believe they receive in the work place. (Learning opportunities, recognition, status, challenging work and so on.)
SALARY~ Pay expressed at an annual or monthly rate.
TOTAL REWARDS~ All rewards received by employees including cash compensation, benefits, and relational returns.
WAGE~ Pay expressed at an hourly rate
WORK/LIFE PROGRAMS~ Integrate their work and life responsibilities
Review Questions:
1. How do differing perspectives affect our views of compensation?
Society has many differing views when it comes to compensation, society views compensation as a measure of justice as well a reason for price and tax increases. Stockholder’s believe in rewarding/ paying employees in stock creates a sense of ownership that will improve overall performance. Managers view compensation as a major expense and a possible way to influence an employee’s behavior. Employees view compensation as a return in exchange for completed work with their employer, an entitlement or a reward. In other countries compensation relates to being taken care of.
2. How does the PAYMODEL help organize one’s thinking about compensation?
Four
Key Terms:
ALLOWANCES~ Compensation to provide for items that are in short supply
COMPENSATION~ All forms of financial returns and tangible services and benefits that employees receive as part of an employment relationship
COST-OF-LIVING ADJUSTMENT~ Percentage increment to base pay provided to all adjustments employees regardless of performance
EXTERNAL COMPETITIVENESS~ Comparison of compensation with that of competitors
INCENTIVES (variable pay)~ Onetime payments for meeting pre-established performance objectives in a future time period.
INTERNAL ALGINMENT~ Pay comparisons between jobs or skill levels inside alignment a single organization
MERIT INCREASE~ Increment to base pay in recognition of past work behavior
RELATIONSHIP RETURNS~ Psychological returns employees believe they receive in the work place. (Learning opportunities, recognition, status, challenging work and so on.)
SALARY~ Pay expressed at an annual or monthly rate.
TOTAL REWARDS~ All rewards received by employees including cash compensation, benefits, and relational returns.
WAGE~ Pay expressed at an hourly rate
WORK/LIFE PROGRAMS~ Integrate their work and life responsibilities
Review Questions:
1. How do differing perspectives affect our views of compensation?
Society has many differing views when it comes to compensation, society views compensation as a measure of justice as well a reason for price and tax increases. Stockholder’s believe in rewarding/ paying employees in stock creates a sense of ownership that will improve overall performance. Managers view compensation as a major expense and a possible way to influence an employee’s behavior. Employees view compensation as a return in exchange for completed work with their employer, an entitlement or a reward. In other countries compensation relates to being taken care of.
2. How does the PAYMODEL help organize one’s thinking about compensation?
Four