Chapter 8 Flashcards
What are total rewards
- comprehensive approach to reward employees
- influences the kind of employees we have and that remain
- we must align rewards with the business strategy
What is total compensation
- direct and indirect
- received in exchange for the employees contribution
- can be time,talent, effort and results
What is direct and indirect compensation
- direct: financial rewards
-Indirect: benefits and services
What does the pay structure consist of
- Job structure (define different pay level between new hire and senior employee)
-Pay level (average amount the organization pays for one job)
What is the benefit of a pay structure
- helps the company to meet goals related to employee motivation, cost control and how to attract and retain workers
What is Job evaluation
- measure internal worth of organisations jobs
- identifies each job’s value
jobs rated for each factor
5 compensable factors
- experience
- education
- complexity
- working conditions
- responsibility
What is piecework rate
- rate of pay per each unit produced
What are pay rates
- rates of jobs can be based on market research
- job evaluation points and pay rates are related
- refleccts the pay structure in the market which does not always match the payments in the company
What are pay grades
- sets of jobs that are grouped together since have a similar are
- may not match market rate
What are pay ranges
- possible pay rates defined by a minimum, maximum and midpoint of pay for a particular job
2 Alternatives to job based pay
- Broadbanding
- Competency based pay system (skill based pay system)
What is broadbanding
- pay grades into a few broad bands
- reduces promotion opportunities
- creates boarder salary range
- provides flexibility for lateral career moves
Competency based pay system
- sets pay according to employee skill or knowledge
- rewards employees for getting more skills
What is the Compa-ratio
- average pay to the midpoint of pay range
-ensures that pay policies and practices match
CR= 1 (average equals midpoint)
CR>1 (average is bigger)
CR<1 (midpoint is bigger)
What is incentive pay
- forms of pay designed to energize, direct or control employees behavior
- linked with employees performance
- may be in comission or bonuses
- company must have different inititives
Requirements for an Incentive pay plan
– performance measurements are linked with company’s goals
-employees can meet performance standards
- employees are given resources to meet goals
- employee value rewards
- pay plans must consider that employees may ignore any goals that are no rewarded
How to pay for individual performance
- piecework rates
-standard hour plans
-merit pay
-performance bonuses
-commisions
Pay for team performance
- Gainsharing (giving gains for productivity)
-Team bonuses
What benefits are legally required
- CPP/QPP
- Employment Insurance (EI)
- Worker’s Compensation
What are other options for benefits
- Paid leave
-Insurance
-Retirement plans - Family-friendly
-Tuition
What are the adv and dis of flexible benefits plans
adv: employees became aware of value and match them with offerings
Dis: Increased costs
