Compensation and Benefits project

Topics: Employment, Structure, Competitiveness Pages: 6 (1478 words) Published: February 15, 2015


Assignment 1
Piu Pooja Jany Palma

1. Answer: The ways differing perspectives of society, managers, and employees affect the views of compensation are: Society’s view
Manager’s view
Employee’s view
Pay as a measure of justice
Benefits as a reflection of justice in society
Job losses (or gains) attributed to differences in compensation Belief that pay increases lead to price increases
A major expense
Used to influence employee behaviors and to improve the organization's performance

Major source of financial security
Return in an exchange between employer and themselves
Entitlement for being an employee of the company
Reward for a job well done

2. Answer: The differences between base pay and performance pay are:

Base Pay
Performance Pay
Base pay- salary or wage is the cash compensation an employee receives for the work performed.

Base pay tends to reflect the value of the work or skills and generally ignores differences attributable to individual employees.

For example; the base wage for machine operators may be $20 an hour. It’s a financial reward system for employees where some or all of their monetary compensation is related to how their performance is assessed relative to certain criteria.

Performance pay is generally used where employee performance cannot be appropriately measured in terms of output produced or sales achieved.

For example; piece-rates and commission, performance related pay is a form of incentive pay. 3. Answer: The three tests that determine whether a pay strategy is a source of competitive advantage are: Align- Is it ‘aligned’?

Differentiate- Does it ‘differentiate’?
Add value- Does it ‘add value’?

The first two tests- ‘align’ and ‘differentiate’ are easy to pass, but the last one- ‘add value’ is the most difficult.
An organization’s compensation practices can have far-reaching effects on its competitive advantage. As compensation expert Richard Henderson notes, "To develop a competitive advantage in a global economy, the compensation program of the organization must support totally the strategic plans and actions of the organization." An organization must contain spiraling costs (such as labor cost, benefit cost) if it is to get a proper return on its human resource investment, andthus gain a competitiveadvantage.

4. Answer: Internal alignment is an important compensation policy because: It affects all three compensation objectives.
They affect employee decisions to stay with the organization, to become more flexible by investing in additional training or to seek greater responsibility. It motivates employees to choose increased training and greater responsibility in dealing with customers It also affects the capabilities of the workforce and hence the efficiency of the entire organization.

5. Answer: The differences are:

Egalitarian
Hierarchical
Definition
Egalitarian structures send the message that all employees are valued equally. Hierarchical structures send the message that the organization values the differences in work content, individual skills and contributions to the organization. Level

Fewer
Many
Pay differential
Large
small
Criteria
Person or job
Person or job
Supports:
Work organization
Fairness
Behaviors
Loose fit (banding)
Teams
Equal treatment
Cooperation
Share knowledge freely
Cross training in jobs
Close fit (banding)
Individual performers
Performance
Opportunities for promotion
Individual contributors
Recognition of differences

6. Answer: Job analysis is the process used to collect information about the duties, responsibilities, necessary skills, outcomes, and work environment of a particular job. It involves five major decisions and they are: Why perform job analysis?

What information is needed?
How to collect information?
Who to involve?
How useful are the results?

7. Answer: The differences are:
Job
Task
Job is a single work assignment...


References: Performance related pay. (n.d.). Retrieved February 8, 2015, from http://www.tutor2u.net/business/people/motivation_financial_performancepay.asp
Reference for Business. (n.d.). Retrieved February 8, 2015, from http://www.referenceforbusiness.com/management/Em-Exp/Employee-Compensation.html#ixzz3QeZm2C3L
UNC EHS Training: UNC Job Safety Analysis (JSA) Training. (n.d.). Retrieved February 8, 2015, from http://ehs.unc.edu/training/self_study/jsa/container.php?page=14
Hr online research presentation. (n.d.). Retrieved February 8, 2015, from http://www.slideshare.net/aaronphamilton/hr-online-research-presentation
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