copyright © 2010 pearson education, inc. publishing as prentice hall9-1 human resource management...

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-1

Human Resource Management

Chapter TenEstablishing Pay Rates

© 2008 Prentice Hall, Inc. All rights reserved.

11–2

Basic Factors in Determining Pay Rates

Direct Financial Payments

Indirect Financial Payments

Employee Compensation


11–3

Compensation Policy Issues Pay for performance Pay for seniority Salary increases and promotions Overtime and shift pay Probationary pay Paid and unpaid leaves Paid holidays Salary compression Geographic costs of living differences


11–4

Equity and Its Impact on Pay Rates

External Equity

Procedural Equity

Internal Equity

Individual Equity

Forms of Equity


11–5

Addressing Equity IssuesSalary Surveys

Job Analysis and Job Evaluation

Performance Appraisal and Incentive Pay

Communications, Grievance Mechanisms, and Employees’

Participation

Methods to Address Equity

Issues


11–6

Establishing Pay Rates

1

2

3

Steps in Establishing Pay Rates

Determine the worth of each job in your organization through job evaluation (to ensure internal equity).

Conduct a salary survey of what other employers are paying for comparable jobs (to help ensure external equity).

Group similar jobs into pay grades.


11–7

The Salary Survey

To price benchmark

jobs

To make decisions

about benefits

Step 1. The Wage Survey:Uses for Salary Surveys

To market-price wages

for jobs


11–8

Establishing Pay Rates (cont’d)

Skills

Effort

Responsibility

Working Conditions

Step 2. Job Evaluation:Identifying

Compensable Factors

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9-9

Human Resource Management

Chapter 11Pay for Performance and

Financial Incentives


11–10

Employee Incentive Plans

Individual Employee Incentive and Recognition Programs

Sales Compensation Programs

Organizationwide Incentive Programs

Executive Incentive Compensation Programs

Team/Group-based Variable Pay Programs

Pay-for-PerformancePlans


11–11

Benefits

Supplemental Pay

Employee Services

Insurance Benefits

Retirement Benefits

Types of Employee Benefits


11–12

Policy Issues in Designing Benefit Packages

Policy Issues

Who will be covered

Coverage during probation

Degree of employee choice

Which benefits to offer

Whether to include retirees

How to finance benefits

Cost containment procedures

Communicating benefits options


11–13

Pay For Time Not Worked

Vacations and Holidays

Parental Leave

Supplemental Unemployment

Benefits

Supplemental Pay

Benefits

Unemployment Insurance

Sick Leave

Severance Pay


11–14

Pay for Time Not Worked Unemployment Insurance

Provides for benefits if a person is unable to work through no fault of his or her own.

Is an employer payroll tax that is determined by an employer’s rate of personnel terminations.

Vacations and Holidays Number of paid vacation days varies by employer. Number of holidays varies by employer. Premium pay for work on holidays.


11–15

Pay for Time Not Worked (cont’d) Sick Leave

Provides pay to an employee when he or she is out of work because of illness. Costs for misuse of sick leave Pooled paid leave plans

Parental Leave


11–16

Pay for Time Not Worked (cont’d) Severance Pay

A one-time payment when terminating an employee.


11–17

Insurance Benefits Workers’ Compensation

Provides income and medical benefits to work-related accident victims or their dependents, regardless of fault. Death or disability: a cash benefit based on earnings per week of

employment. Specific loss injuries: statutory list of losses.

Controlling workers’ compensation costs Screen out accident-prone workers. Make the workplace safer. Thoroughly investigate accident claims. Use case management to return injured employees to work as

soon as possible.


11–18

Other Benefits Issues Life Insurance

Types Group life insurance Accidental death and dismemberment

Personnel policies Benefits-paid schedule Supplemental benefits Financing


11–19

Other Benefits Issues Benefits for Part-Time and Contingent

Workers Leave and health benefits are now more

commonly available to part-time workers. Benefits for long-term independent contractors.


11–20

Family-Friendly Benefits Subsidized child care Sick child benefits Elder care Time off Subsidized employee transportation Food services Educational subsidies Fitness and medical facilities Flexible work scheduling


11–21

Flexible Benefits Programs Cafeteria (Flexible Benefits) Approach

Each employee is given a limited benefits fund budget to spend on preferred benefits.

Types of plans Flexible spending accounts Core plus option plans

Flexible Work Arrangements Flextime schedules Compressed workweek schedules Job sharing Work sharing Telecommuting

copyright © 2010 pearson education, inc. publishing as prentice hall9-1 human resource management...

Documents