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What does compensation (what you receive for your services) mean to you?
A Definition . . .
All forms of
financial return, tangible services and benefits
Indirect
insurance plans
life, health, dental, disability
paid absences
vacations, holidays, sick leave
Job Environment
policies, supervision, co-workers, status symbols, working conditions, flextime, compressed work week, job sharing, telecommuting, flexible benefits programs
WAGE MIX
Collective Bargaining
Legal Requirements Employers Ability to Pay
Results:
pay grades rate ranges
Equity Theory
Equity Op/Ip = Oo/Io Under-reward Inequity Op/Ip < Oo/Io Over-reward Inequity Op/Ip > Oo/Io
p = personal, o = comparison other I = Inputs effort, ability, experience O = Outcomes pay, benefits, perks
Why does Equity Matter? What Behaviors are Likely to Occur when Inequity is Felt?
A. Pay Level
Defined: average rates paid by employer Applicable concept: External Equity 3 Pure Alternatives
lead competition match competition lag competition
Select key jobs. Determine relevant labor market. Select organizations. Decide on information to collect: wages/benefits/pay policies. Compile data received. Determine wages and benefits to pay.
Which company is leading the market? Which company is lagging the market? What would the wage level line look like for a company that was meeting/matching the market?
B. Pay Structure
Defined: pay rates for different jobs within a single organization Applicable concept: Internal Equity Pay more for jobs with
greater qualifications less desirable working conditions more valuable output
Job Evaluation
defined: the systematic evaluation of job descriptions outcome: a hierarchy of organizational jobs according to their content and value to the organization Methods:
ranking classification factor comparison point method
Point System
Quantitative job evaluation procedure that determines the relative value of a job by the total points assigned to it
Wage Curve
Curve in a scattergram representing the relationship between relative worth of jobs and wage rates
Pay Grades
Groups of jobs within a particular class that are paid the same rate or rate range
An individual whose current pay is below the minimum of the pay grade for his/her job
Nonexempt Employees
Employees covered by the overtime provisions of the Fair Labor Standards Act
Exempt Employees
Employees not covered by the overtime provisions of the Fair Labor Standards Act
Comparable Worth
The concept that male and female jobs that are dissimilar, but equal in terms of value or worth to the employer, should be paid the same
Wage-Rate Compression
Compression of differentials between job classes, particularly the differential between hourly workers and their managers