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28 Cards in this Set
- Front
- Back
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Why are compensation systems important?
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· Compensation systems help to motive, attract and retain employees. · Helps to influence standards of living · Helps to meet goals of organization |
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List the main goals of a compensation system
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1. Help achieve strategies and objectives of the organization 2. Help attract, retain, and motivate employees 3. Have philosophical and moral implications 4. Influences standard of living 5. Influence financial value of the pay system to the organization’s bottom line 6. Address internal and external equity issues |
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Extrinsic
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Things that are basic needs (Survival,Security, Social Needs, Helps Negotiation) |
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Intrinsic |
Thing that are emotional needs ( Self-Esteem, Achievement, Growth, Development) |
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What are the 3 main components of a compensation system?
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1. Base Pay (Determined by Time) 2. Indirect Pay ( Health Insurance or Retirement Plan) 3. Performance Pay ( Money as a reward in regards to performance) |
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List and describe the steps in developing an effective compensation system.
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1. Understand organizational context: The reward system must fit with and support the other parts 2. Determine mix of compensation components to include and total level of compensation components 3. Establish the processes for determining actual dollar values for jobs and for individual employees ( Job Performance, Performance Appraisal, Labor Market Surveys) 4. Design your performance pay and indirect pay plans 5. System, communication information about the system,dealing with compensation problems, budgeting, and controlling compensation costs |
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What are the variables (both contextual and structural) that determine the most appropriate management strategy?
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Contextual: Organizations Environment, Business Strategy, Technology, Size, Workforce Structural: Reward System ,Job Design, Coordination and Job Departmentalization, Decision Making and Leadership Structure, Communication and Information, Structure, Control Structure |
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What are the 3 managerial strategies and what are the differences between them?
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1. More thinking than doing, jobs are more fragmented, communication is formal and is done through a hierarchy system 2. Human Relations: Job allows more social contact, communication can be formal or informal 3. High-Involvement: Collaborative planning and goal setting, more meaningful jobs. Communication is vertical as well as horizontal. |
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What factors have caused an evolution of the managerial strategies. List 5
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1. Corporate Strategy 2. Nature of Workforce 3. Organization Size 4. Environment 5. Technology |
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What are the expected attitudes and behaviors outcomes of a reward system?
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Attitudes: Job Satisfaction, Work Motivation, Organizational Identification Behaviors: Membership Behavior, Task Behavior, Organizational Citizen Behavior |
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What is the difference between distributive justice and procedural justice when it comes to rewards?
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Distributive Justice: thinking that the reward outcomes will be fair Procedural Justice: thinking that the process for reward determination is fair |
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What conditions must be met for procedural justice to occur?
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1. Consistent 2.Free of Bias 3.Flexible 4.Accurate 5.Ethical 6. Representative |
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Define membership behavior. Why is it important in compensation? What is an important theory in understanding task behavior? Outline that theory.
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Membership Theory: when employees decide to join and remain with a firm. Two-Factor Theory of Motivation: 1. Hygiene’s are things that make them feel dissatisfied with their job 2. Motivators make them feel satisfied.Job |
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List the consequences of reward dissatisfaction.
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1. Violation of Psychological Contract 2. Perceived Inequity |
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What are the three types of base pay methods?
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1. Job Evaluation 2. Market Pricing 3. Pay for Knowledge |
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What are two advantages and disadvantages of the 3 base pay methods? |
Job Evaluation: Pros: Signals importance of different jobs, Promotes internal equity Cons: Job descriptions costly to develop, inhibit factors of change Market Pricing: Pros: Simplicity and cost, Keeps jobs aligned with market conditions Cons: Different employers define jobs differently, Does not address internal equity Pay for Knowledge: Pros: Incentive to learn new skills, no job description necessary Cons: Workers top out, unions may resist |
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What is the process for outlining the behavioral implications of an effective rewards system?
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1. Define Employee Behavior 2. Find attributes to needed to perform needed behavior 3. Identify needs that employees find relevant 4. Ensure morale by offering rewards 5. Performance will lead to rewards 6. Make sure that employee effort will lead to desired behavior |
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Compensation Mix Choice 1 |
Base Pay 1. Job Evaluation 2. Market Pricing 3. Pay for Knowledge |
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Compensation Mix Choice 2 |
Performance Pay 1. Individual Performance 2. Group Performance 3. Organization Performance |
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Compensation Mix Choice 3 |
Indirect Pay 1. Mandatory 2. Pension Plan 3. Health & Life Insurance 4. Pay for Time Not Worked 5. Employee Services 6. Other Benefits |
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What are the major categories of indirect pay?
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1. Benefits mandated by law (CPP, EI, Workers Comp) 2. Deferred income (Retirement Plans) 3. Life Insurance (medical, dental, disability benefits) 4. Paid holidays and sick leave 5. Employee services (psychological and counseling) 6. Misc.Benefits (company car, discounts of products) |
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Vision |
What the organization hope to be in the future
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Mission |
The reason why an organization exists
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Values |
Principle,beliefs and attitude that contribute to behavior
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Vertical Fit |
Strategies at different levels
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Horizontal Fit |
Strategies at the same level
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Business Strategy |
Plan for meeting goals
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Organizational Structure |
How a business generates behaviors that will help to execute a business strategy
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