Exam 1 Flashcards
Incentive Effect
o Degree to which pay influences motivation
Incentive Effect
o Degree to which pay influences motivation
Sorting effect
o Effect pay has on the composition of the workforce
Direct Returns
Total compensation (cash and benefits)
Indirect returns
Relational, (recognition, opportunity)
Merit is based on?
Changes in others pay, living costs, and experience or skill
Merit pay
increases base salary, but meritbonus is aone time payment
Incentives are
objective and don’t increase base salary, must eb reearned
Pay Model Objectives
Efficiency, Fairness, Compliance, Ethics
Pay Model Policies
Internal alignment, external competition, employee contributions, management
Sorting effect
o Effect pay has on the composition of the workforce
Direct Returns
Total compensation (cash and benefits)
Indirect returns
Relational, (recognition, opportunity)
Merit is based on?
Changes in others pay, living costs, and experience or skill
Merit pay
increases base salary, but meritbonus is aone time payment
Incentives are
objective and don’t increase base salary, must eb reearned
Pay Model Objectives
Efficiency, Fairness, Compliance, Ethics
Pay Model Policies
Internal alignment, external competition, employee contributions, management
Best practice
Socio, HRRp, Strat Form, Gainign comp adv
Best fit
Socio, Strat form, HRP, gaining comp adv
AMO Theory
Ability,, MOtivation, Opportunity, P=f(A,M,O)
SAS Institute Hr Policy
work/life programs > cash compensation
RBV must
add value
unique and rare
imperfectly imitable
not substitutable
Internal Alignment
is pay relations among jobs/skills in an organization
External Competitive ness includes:
Econmic Pressures
Government policies and regulations
External stakeholders
cultures and customs
Three features of internal pay structure
Hierarchal or compressed
How to distribute
Work content
Hierarchal (layered, dispersion)
Description of work done at each level, incentive effect ( lower turnover)
Egalitarian (delayered, compression)
Removing job titles, negative or detrimental sorting effect
Two features of external competitiveness
Pay level - Avg rate an employer pays
Pay mix- various types of payments leading to total comp
Mods to labor demand side
Compensating differentials - employers offer higher wages if job has negative characteristics
Efficiency wage - high wages increase efficiency and lower labor costs
Signaling theory - pay levels to emplpyee signaling behavior
Mods to labor supply side
Reservation wage - lowest wage they’ll accpet
Human Capital - people paid at marginal value of what they provide
Competitive pay policies
Lead, match, lag
Job analysis
systematic process of collecting observable info that identifies similarities and differences between work
Job Description
Tasks, duties, responsiblities
Job specification
KSAO necessary for the job
Job analysis to compensation
Internalyl fair and aligned job structure, provides rationale for differences
Enhance flexibility in job design
Broad descriptions, easily changing tasks
Usefulness of job analysis
Reliability, validity, acceptability, currency, usefulness
Job evaluation
Process for dtermining the relative value of jobs to create a job structure
Job eval methods
ranking, classification, point
Ranking
Alternation, orders alternaitng at each extreme
Paired, matrix compares all jobs
Classification
Jobs -> Class
Point
Compensable factors numerically scaled and weighted
Skill-based pay
Link pay to depth and breadth of the KSAO relevant person
Competency based pay
Underlying KSAO needed to succeed
