Chapter 8 Flashcards
Total rewards
approach to compensating and rewarding employees
-Creates a value proposition for current and prospective employees
-align rewards with the business strategy
Total compensation
-direct: financial rewards employees receive as part of their employment
-indirect: benefits and services employees receive
Decisions about pay base
-legal requirements (equal pay for equal work, minimum wage, overtime pay)
-market forces (product markets and labor markets)
-organization’s goal (high quality workforce, equity and fairness)
Pay level decision
-pay rates
-pay grades
- pay ranges
-pay differentials
pay structure
helps the organization meet goals related to employee motivation, cost control, and ability to attract and retain
-Job structure—the relative pay for different jobs within the organization
-Pay level—average amount the organization pays for a particular jo
legal requirements
-human rights legislation
-employment/labor standards
-pay equity
-pay transparency
human rights legislation
differences in pay must link to job responsibilities or performance
employment/labor standards
laws provide minimum requirements
pay equity
attempts to address the wage gap between female and male dominated jobs
pay transparency
-employers have several requirements
pay level
-range in which organisations make decisions
-gathering information about market pay (benchmarking: compare practices to competitors)
-pay fairness (based on equity theory)
job structure: relative value of jobs
-Job evaluation: measuring the relative internal worth of the organization’s jobs
-compensable factors: experience, education, complexity, working conditions, responsibility
pay structure
-hourly wage
-piecework rate
-salary
pay rate
Rates of key jobs can be based on market research.
-Reflects the pay structure in the market, which does not always match rates in the organization.
pay grade
Sets of jobs having similar worth or content grouped together to establish rates of pay.
