Week 8- Compensation Management Flashcards
What is Absolute income?
reflects the total amount of earnings one receives in a given period
what is Relative income?
measures your income in relation to other members of society
what is Correct amount of compensation?
The right amount of compensation is the level that takes money off the table and seems fair. This is a relative income measure.
What are some Types of Compensation ?
Base pay - salary, hourly rate
Commissions - variable pay based on sales
Overtime pay - extra pay for extra work
Bonuses - Profit Sharing - Merit Pay - special pay based on performance
Allowances - given to cover job-related expenses
Benefits - dental, insurance, medical, vacation, leaves, retirement
(Compensation Uses) what does acquiring personnel entail?
good pay bring in employees
(Compensation Uses) what does Retaining employees entail?
good pay keeps employees
(Compensation Uses) what does Ensuring equity entail?
ensures the pay is fair relative to position and merit
- Quarterly pay adjustments instead of scheduled pay review
- Offering hiring bonuses to new talent avoids unequal salaries
- Providing existing staff with spot bonuses to reward their contributions
- Offering stock options or shares in the company to employees
(Compensation Uses) what does Administrative efficiency entail?
commonly outsourced
(Compensation Uses) what does Reward behaviour entail?
commissions reward wanted behaviour and provide recognition
(Compensation Uses) what does Control costs entail?
limitation of compensation as firms set aside 40-80% of expenses
(Compensation Uses) what does Legal compliance entail?
paying what’s required minimum wage, hazard pay
What are the 4 phases of Compensation Management?
- Phase I Job analysis - identify and study jobs
Position description, job descriptions, and standards - Phase II Job Evaluation - determine relative value provides for internal equity
Job grading - Job ranking - Point systems - Phase III Salary Surveys - discover what others pay provides for external equity
HRSDC - Consultants - Employer Associations - Professional Associations - Phase IV Pricing Jobs - establish the pay for each job
Job classes and rate ranges, philosophy, commission, pay per performance
examples from class
Tulsa (remote pay)
Tulsa (remote pay)
Town with low cost of living offers cash to get remote workers to move in
EX from class
Dan Price (compensation philosophy)
Min wage $70,000 takes money off the table
Drops turnover increases the amount of people applying
ex from class
Uber (diver poverty)
Ontario Labour Ministry found Ontario courier to be an employee
Uber drivers are not employees → they don’t get benefits
None of the weekly pay statements reached Ontario minimum wage
