Chapter 1 Introducing the Pay Model and Pay Strategy
1. How do differing perspectives affect our views of compensation? There are four perspectives in terms of views of compensation: Society’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
* Using stock to pay employees creates a sense of ownership * Linking executive pay to company performance supposedly increases stockholders' returns Manager’s view
* A major expense
* Used to influence employee behaviors and to improve the organization's performance Employee’s view
* 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. What is your definition of compensation?
Which meaning of compensation seems most appropriate from an employee’s view: return, reward, or entitlement? Compare your ideas with someone with more experience, someone from another country, someone from another field of study. Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship.
3. What is the “network of returns” that your college offers your instructor? What returns do you believe make a difference in teaching effectiveness? What “returns” would you change or add to increase the teaching effectiveness? The network of returns is more likely to be useful if bonuses, development opportunities, and promotions all work together.
4. What are the four policy issues in the pay model? What purpose do the objectives in the pay model serve? Four policies:
* Internal alignment
* External competitiveness
* Employee Contributions
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