final present compen

8/12/2019 Final Present COMPEN

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Presented by:Ahmad Zhafir+Nur Amirah+

Nurul Akmar+Nor Amalina+Muhammad Faiz


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Behaviours that employer care Theory and research say to get the behaviour

Compensation people say to get the behaviour

Total reward system

General comment of compensation motivatebehaviour

Specific comment of compensation motivatebehaviour

Designing a pay for performance plan


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Employer want employees to perform in waythat lead to better organizationalperformance.

Organizational strategy is the guiding forcethat determines what kinds of employeebehaviours are needed


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Employee performance= f(S,K,M)

WhereS = skill and ability to perform task

K = knowledge of fact, rules, principleand procedure

M = Motivation to perform


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Organization

strategy

Corporate

goal

Department

goals

Individual

goals

Employee task

behaviour


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Behaviors that compensation needs to reinforce sufficiently attractive to make recruiting and hiring good

potential employees possible (attraction)

Need to make sure the good employees stay with thecompany (retention)

Need to find ways to motivate employees to perform wellon their jobsto take their knowledge and abilities and

apply them in ways that contribute to organizationalperformance

Performance measurement

Performance management


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How do we get good employment prospectsto joinour company?

How do we ret inthese good employees oncethey join?

How do we get employees to develop skillsfor current and future jobs?

How do we get employees to perform wellontheir current job?


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3 elements of motivation:

What is important to a person? Rewards in exchange of desired

behaviors

Desired behavior


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Pay systems influenced by: individual performance

changes in cost of living

seniority

market rate

e.g : Maslow's need heirarchy & Herzberg's twofactor theory


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MASLOWS THEORY HERZBERGSTHEORY

1. Meaning Based on concept of humanneeds and their satisfaction

Based on the use of motivatorswhich include achievement,recognition and opportunity forgrowth.

2. Basis of

Theory

Hierarchy of human need Hygiene factors and motivating /

satisfiers factors

3. Nature ofTheory

Simple and descriptive More prescriptive

4. Applicability

of Theory

Mostly applicable to poor and

developing countries wheremoneyIs still a big motivating

factor.

Applicability is narrow. It is

applicable to rich and developedcountries where money is lessimportant motivating factor.

5. Motivators Any need can act asmotivator

Hygiene factors (lower level needs)do not act as motivators. Only the

higher order needs (achievement,recognition, challenging work) act


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Not concentrate on needs, but rather focuses on outcomes

1. Expectancy: Effort Performance (EP)

2. Instrumentality: Performance Outcome (PO)3. Valence - V(R)

The theory states that individuals have different sets of goals andcan be motivated if they believe that:

There is a positive correlation between efforts and performance.

Favorable performance will result in a desirable reward.

The reward will satisfy an important need.


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Focus less on need but more on rewards inexchange of desired behaviors

Employer identify important behavoirs &outcome, pay specifically for achievingdesired levels

e.g : Expectancy theory, Equity theory andagency theory


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Emphasis of a large body of goal-settingresearch

How we set goals can influence the performancelevels of employees

e.g : workers assiged "hard" goals do better than

workers told to "do your best"


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Employees learned what behaviours wereimportant as part of the socialization process.

Compensation is designed to support therisk-taking behavior.

Money is great equalizer but isnt everything.

Total reward system Compensation is oneof many rewards that influence employee

behavior.


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1.COMPENSATION 2. BENEFIT3. SOCIAL

INTERACTION

4. SECURITY

5. STATUS /

RECOGNITION6. WORK VARIETY 7. WORKLOAD

8. WORK

IMPORTANCE

9. AUTHORITY \

CONTROL \

AUTONOMY

10.

ADVANCEMENT11. FEEDBACK

12. WORK

CONDITIONs

13.

DEVELOPMENT

OPPORTUNITIES

COMPONENTS OF TOT L REW RDSSYSTEM


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WAGECOMPONENTS 1. BASE PAY -Employees wage package.

2. ACROSS THE BOARD INCREASE wages increase to allemployees regardless of performance.

3. COST OF LIVING INCREASE Based on change in costof living.

4. MERIT PAY Based on employees past performance.

5. LUMP SUM BONUS One-time bonus.

6. INDIVIDUAL INCENTIVE Based on extra individualproduction.

7. SUCCESS SHARING PLANNING Focus only on groupperformance CONSIST OF 2TYPES Profit sharing & Gain sharing

8. RISK SHARINGS PLAN Shares in the success &Panalized during poor performance.


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Join a firm

Stay or leave a firm

Develop job skills Perform better


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Level of pay

Pay system characteristic

Personalities

values


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Development opportunity

Social

Work

Benefits Pay based on individual

performance

Group incentive plans

Employee satisfaction

Pay system


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Pay employees for learning newskills

Skill-based increments

Pay for skill may not increaseproductivity


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Productivity/performanceincrease

Incentive effect

Sorting effect


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Efficiency-strategy

-structure

-standard Equity

Compliance


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Employee performance depend on someblend of skill, knowledge and motivation.

Absence any of the ingredient, performanceis likely to be sub optimal.

Reward must: Help organization attract and retain employees

Make high performance and attractive option foremployees

Encourage employees to build new skill andgradually foster commitment to organization

final present compen

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