Total Returns for work (Milkovich)

Transactional and Relational Returns

Pay Model (Milkovich)
Total Returns (SCB)
Total Returns for work (Milkovich)
 1. Assess Total Compensation
Implication
- Competitive Dynamics
- Culture / Values
- Social and Political Context 2. Fit Policy Decisions
- Employees / Union Needs to Strategy
- Other HR System - Objectives
- Alignment
- Competitiveness
- Contributions
- Management
4. Reassess the Fit
- Realign as Conditions Change
- Realign as Strategy Change
3. Implement Strategy
- Design System to Translate
Strategy into Action
- Choose Techniques to Fit Strategy
 Social’s Views Stake holders’ Views

Employees’ View Managers’ Views

 Reliability Validity

Acceptability Usefulness
 Strategic Work
(Value Creation)
Top
Management
Tactical Work
(Value Added)
Middle Management
Specialist
Transactional Work
(Routine Job or
Workers non value added)

Employees’ performance depend on 3 factors :

1.) S – Skills and ability to perform tasks.
2.) K – Knowledge of facts, rules, principles and procedures.
3.) M – Motivation to perform.
Compensation Management Framework
Business HR Compensation
Strategy Strategy Management

- High Performance PMS Pay for Position

- Pay Structure
- Special group pay

- Low Cost Compensation- Pay for Person

Management - Competency based Pay
- Knowledge & Skill based Pay

- High Quality- Compensation- - Special pay for special competency

Service Management - Potential based pay (Starting rate)

- High Effective- Compensation- Pay for Performance

Management - Merit increase
Process - Bonus Incentive
- High Employee- - Profit Sharing
Satisfaction - Gain Sharing