ELECTIVES Flashcards
often called internal equity,
refers to the pay relationships among different
jobs/skills/competencies within a single
organization
INTERNAL ALIGNMENT
COMPENSATION STRATEGY
Supports organization strategy
● Supports workflow
○ Workflow refers to the process
by which goods and services
are delivered to the customer
● Motivates behavior
○ Structure must be fair to
employees
refers to the process
by which goods and services
are delivered to the customer
Workflow
An internal pay structure can be defined by:
● The number of levels of work
● The pay differentials between the levels
● The criteria or base used to determine
those levels and differentials
Pay structure is hierarchical in nature, based on:
● Number of levels
● Reporting Relationships
The pay differences among levels are referred to as differentials
DIFFERENTIALS
Pay is determined by:
● Knowledge/ skills involved
● Working conditions
● Valued addition to the company
refers to the work performed in a job
and how it gets done
Content
refers to the worth of the work; its relative
contribution to the organization objectives
Value
Structure ranks jobs on skills required,
complexity of tasks, problem solving,
and/or responsibility
Content
Structure focuses on relative
contribution of skills, tasks, and
responsibilities to the organization’s
goals
Value
reflects the value of goods or
services an employee produces in a job
(refers to the output produced by
employees)
Use value
refers to the wage the
employer and employee agree on for a
job
Exchange value
structures rely on the work content – tasks, behaviors, responsibilities
Job-based structures
structures shift the focus
to the employee
○ Skills, knowledge, or
competencies the employee
possesses
○ Whether or not they are used in
the particular job
Person-based structures
