Managing Human Resources:

1
Managing Human Resources

• The HR Environment
• Acquiring Preparing HRs
• Assessing Performance Developing Human
  Capital
• Compensating HRs
• Meeting Other HR Goals

2
Establishing a Pay Structure (Chapter 11)
3
Why is compensation important to employees?
4
Why is compensation important to employers?
5
Where should the organizations compensation
policy come from?
6
Goals of the compensation program

• -- to ______, _______, and _______
• _________ ___________!

7
To achieve these goals, employees must perceive
both PAY EQUITY and PAY EXPECTANCY.
8
Pay Equity --

• perceived fairness
• outcome/input ratios (self v. other)
• internal and external comparisons
• efforts to correct perceived inequities

9
Pay Expectancy --
effort
performance
reward
expectancy
instrumentality
valence
10
Establishing pay structures...

• satisfaction and motivational issues
• government influences
• unions
• industry competitiveness
• general economic conditions
• labor market conditions
• area wage rates cont...

11
Establishing pay structures (cont.)

• ability to pay (labor budget)
• managerial pay strategies
• jobs relative worth (job evaluation)
• employees relative worth (performance evaluation)

12
Government influences

• Fair Labor Standards Act
• minimum wage
• overtime provisions
• exempt and non-exempt
• child labor restrictions
• Equal Pay Act
• Title VII
• Other ADEA, ADA, ERISA, COBRA, SSA, Federal Wage
  Garnishment Law, Davis-Bacon, Walsh-Healy....

13

• job evaluation --
• systematic process of determining the
  relative worth of jobs within the
  organization
• compensable factors
• job characteristics the company values and is
  willing to pay for

14
Plot job evaluation info
15
creating a pay policy line
16
Adjust per the firms comp strategy

• compensation strategy lead, meet, lag the market

17
and add pay grades
18
compensation plan structure

• pay grade
• pay range
• pay policy line
• red / green circle rates

19

• The structure may need to allow for pay
  differentials

20
Alternative compensation methods

• market-based pay
• broadbanding
• skill / competency-based pay
• team-based compensation
• incentive compensation