Total Rewards Flashcards
Compensation Philosophy
Is a short (but broad) statement documenting the organization’s guiding principles and core values about employee compensation.
Test for Compensation Philosophy
Is the overall program equitable?
Is the overall program defensible and perceived by employees as fair?
Is the overall program fiscally sensitive?
Is the compensation philosophy legally compliant?
Can the organization effectively communicate the philosophy to employees and prospective candidates?
Are the programs the organization offers fair, competitive, and in line with the compensation philosophy and policies?
Evaluating Total Rewards
Is the system strategy in compliance?
Is the system strategy compativle with the orgs mission & strategy?
Does the system strategy fit the culture? Is it appropriate for the workforce?
Is the system strategy internally equitable?
Is the system strategy externally competitive?
Entitlement-oriented
Some organizations promote a caring, protective feeling and want employees to feel as if they are a part of the family. These organizations feel that employees are entitled to benefits such as health care, employee assistance, or disability insurance as a condition of employment
Contribution-oriented
The compensation programs of other organizations are more performance-driven, putting emphasis on the performance and contributions of individual employees. These compensation systems emphasize performance-based pay, incentives, and shared responsibility for benefits.
Steps in Compensation Design
Job Analysis
Job Documentation
Job Evaluation
Pay Structure
Job-content-based job evaluation
the relative worth and the pay structure of different jobs are based on an assessment of their content (for example, responsibilities and requirements) and their relationship to other jobs within the organization
Types of executive Comp
Annual Salary
Stock option plans
Stock purchase plans
Restricted stock grants
Phantom stock
Restricted stock units
Performance grants
