MHR523 - Chpt 9 & 10: Compensation Mgmt Employee Benefits

• Employee Rewards

  • Organizations reward employees because if they have emotive (money) they will be motivated to work harder
• Aligning total rewards with strategy 

  • Creating compensation package (including wages, incentives and benefits) that produces the employee behaviors the firm needs to achieve its competitive strategy
• Monetary Rewards:

  • cash payments
  • benefits
• Non-monetary rewards:

  • personal growth rewards
  • interpersonal rewards
• Total Rewards 

  • “Everything that the employee receives in terms of both direct and indirect compensation”
• Direct compensation 

  • Employee wages and salaries, bonuses, and commissions
• Indirect compensation

  • All other forms of rewards, such as extended health and dental plans and other programs and plans that offer rewards or services to employees
• Establishing Pay Rates

  1. Job Evaluation
  2. Conduct wage/salary survey
  3. Combine job evaluation and salary survey to determine pay
• Benchmark job: 

  • Common jobs within a company
• systematic comparison: Comparing every jobs ranking within the company
• Compensable factors: 

  • Fundamental elements of a job. 
  • Grouped into four categories: skills, effort, responsibility, working conditions (required by pay equity)
  • Ex. work experience, uni degree,
• • Point Method 
  • Identify compensable factors (e.g., skills, effort, responsibilities, working conditions) 
  • Determine the degree to which each factor is present in each job
• • Wage curve
  • A graphic description of the relationship between the value of the job and the average wage paid for this job 
• • Pay ranges 
  • a series of steps or levels within a pay grade, usually based on years of service
• • Broadbanding 
  • Reducing the number of salary grades and ranges into just a few wide levels or “bands,” each of which contains a relatively wide range of jobs and salary levels
• Sample Pay Range

  
• Sample Broadbanding

  
• Sample Wage Curve

  
• Pay equity 

  • “Equal pay for work of equal value”
• Pay transparency 

  • Openly sharing information about compensation with employees and job candidates 
• Incentives 

  • a payment to stimulate greater output
• Types of Incentive Plans 

  • Organization-wide: merit pay, profit sharing  
  • Operations employees: tied to performance  
  • Senior managers and executives: end of year bonus 
  • Salespeople: commission
• “Benefits: indirect financial payments given to employees. They may include supplementary health and life insurance, vacation, pension plans, education plans and discounts on company products”
• Government-Mandated Benefits 

  • Employment Insurance (EI)
  • Pay on Termination of Employment 
  • Leaves of Absence
  • Canada/Quebec Pension Plan (C/QPP)
  • Vacation and Holidays
  • Paid Breaks
• Employment Insurance (EI)

  • a federal program that provides income benefits if a person is unable to work through no fault of his or her own
• Voluntary Employer-Sponsored Benefits 

  Life Insurance 

  Healthcare / Medical Insurance 

  Sabbaticals 

  Retirement Benefits 

  Defined Benefit Pension Plan

  Defined Contribution Pension Plan

  Group RRSP

  Deferred profit sharing plan (DPSP)