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8 Cards in this Set
- Front
- Back
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Financial Accounting Standards Board (FASB) - 1973
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The FASB is a private body that decides how financial executives should report their firms' financial information to their shareholders. It derives its authority from the Securities & Exchange Commission (SEC), and the SEC enforces the accounting standards.
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Total Compensation System - Ojectives:
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1. Campatible with the organizations's mission & strategy.
2. Compatibale w/ the corp. culture 3. Appropriate for the worforce. 4. Externally equitable. 5. Internally Equitable. |
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"Entitlement-Oriented" Compensation
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* Employees = "part of the family".
* Employees are entitled to benefits such as health care, employee assistance, or disability insurance. * Often as benefits increase, less emphasis is put on individual employee contributions, initiative, & responsibilty, as more emphasis is put on the profitability /success of the organization as a whole. |
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"Contribution-Oriented" Compensation System
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*Sees employees as contributors.
* Compensation Program is "performance-driven, stressing individual contributions. * Emphasize performace-based pay, incentives, and shared responsibility for benefits. (ie. 401k instead of pension) |
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External Equity -
(Compensation) |
Involves comparing an org's compensation levels & practices to other org's in the same market
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For pay purposes: The 3 factors that define their the relevant labor markets.
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Companies compete for employees w/ other co.'s who share their:
1. Industry - Both co.'s have similar products or services. 2. Occupation - Both Co.'s employe workers w/ same experience or skills 3. Location - Both co.'s employe workers in same georaphical area. |
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The three Market options that employers may choose in deciding their compensation systems.
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1. Match the Market - choose to match the market's wages & benefits (Externally Competitive)
2. Lead the Market - org. strives to recruit & retain most desirable talent by offering higher salaries &/or benefits. 3. Lag the Market - Org.'s because of economic necessity set pay rates below market. |
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Internal Equity (Comepnsation)
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* Employees need to see basic fairness between what they bring to the company and how the co. rewards them.
Unique jobs are fairly compensated by the org. as performance or job differences result in corresponding differences in pay rates. |
