9: Compensation/Wages & Performance Evaluation Flashcards
Main purpose of compensation?
Attract and retain talented employees.
Types of Compensation?
- Direct Compensation
- Indirect Compensation
- Non-financial Compensation
Financial rewards given.
Direct Compensation
Given by employees other than financial remuneration, ex. Travel, educational, health insurance.
Indirect Compensation
- recognition programs
- enjoying management support, ideal work environment, and convinient work hours.
Non-financial Compensation
Considerations for compensation:
- Pay equity
- Expectancy theory
Is achieved when employees feel their pay is fair in relation to their job responsibilities.
Pay equity
Predicts that employee motivation is influenced by the perceived relationship between effort, performance, and rewards.
Expectancy Theory
Formal union to represent workers in negotiation with employers.
Labor union
Concern: low wages and benefits
Financial needs
The first step in union organizing.
Employee/Union Contract
Involves identifying and selecting potential leaders among employees.
Step 2. Initial organizational meeting
Convincing employees to sign an authorization card to show their willingness.
Step 3. Formation of the In-house organizing commitee
Representation petition is filed with the National Labor Commission or NLCR
Step 4. If sufficient employees support
What is the primary benefit of strong employee relations?
For businesses to improve overall performance.
2 categories of Reward System?
Monetary and Non-Monetary
Rewards that do not pertain money.
Non-monetary
Given in exchange for work performance.
Pay/Salary
Given to workers to improve the quality of their work and personal lives.
Benefits
Pay-for-performance, ex. Bonuses, merit pay.
Incentives
The primary purpose is to attract and retain top talents.
Executive pay
