Compensation and Reward Management Flashcards
Reward
a core element of employment relationship is payment of employees
contemporary developments in reward
the environment - global competition / public sector cuts
total reward
contractual benefits in an employee job description
keep the costs down
not only the aspects that involve payment but a broad range of other elements
your company could say its 24,000 a year but worth 40,000 with benefits that they add
contingency pay
so as to achieve longer term objectives
if increasing skills is a priority - make salary progression or bonus payments condition on their attainment
if want to increase productivity - payment systems reward people or teams for their output
the new pay
concept of 1990s to reflect the need for an understanding of organisation’s goals, values and culture.
this is associated with decline in trade union influence, and collective bargaining system
consequences of getting pay wrong
incentivising the wrong behaviour
setting wrong level of basic rate
departure of good performers
higher absence levels
less effort
deteoriation of organisations employee relations climate
reduce org effectiveness and damage its financial outcome
reward management determine which outcomes
org profitability compared to competitors
whether an org thrives or survives
standard of living that employees can enjoy
motivation at work - discretionary behaviour
ability to recruit and retain staff in competitive labour markets
pay not always at managerial discretion
-min wage, equal pay
tighter labour market - harder to recruit and retain the best people
encourage good behaviours
discourage unwanted behaviours
Reward management strategy 4 components
clear statements of intention
business rational
guiding principles and values
implementation plan
employer objectives pay
attracting staff retaining motivating driving change corporate reputation affordability
economic explanations for pay variations
sorting by ability imperfect information compensating differentials monopsony one buyer efficiency wages
neo institutional critique
usa mid 20th century opposing the view of Smiths
not just about supply and demand
institutional forces -
presence of unemployment
pay rates for occupations within localities differ
managerial policies create differences
why do pay systems vary
external labour market
internal labour market
job evaluation
collective bargaining
pay dispersion vs compression
different amounts - dispersion - conflict can occur inequity
compression - negligible differences in pay between people who have different skill sets
motivation
mixture of extrinsic, intrinsic, social rewards
total reward
balance between pay, benefits, work life balance, individual growth and development, positive workplace and future opportunities
