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Chapter 11 dessler 12-ce_ppt_ch11
1.
Chapter 11: Strategic
Pay Plans Strategic Pay Plans | 11-1 Copyright © 2014 Pearson Canada Inc. All rights reserved. Dessler, Chhinzer, Cole Human Resources Management in Canada Canadian Twelfth Edition
2.
Learning Outcomes • EXPLAIN
in detail each of the three stages in establishing pay rates. • DISCUSS competency-based pay. Strategic Pay Plans | 11-2 Copyright © 2014 Pearson Canada Inc. All rights reserved. • EXPLAIN the strategic importance of total rewards.
3.
Learning Outcomes • DEFINE
pay equity and EXPLAIN its importance today. Strategic Pay Plans | 11-3 Copyright © 2014 Pearson Canada Inc. All rights reserved. • DESCRIBE the five basic elements of compensation for managers.
4.
Strategic Importance of Total
Rewards • monetary (extrinsic) • compensation: cash payments and benefits • personal growth and interpersonal rewards • total awards approach • rewards are part of integrated whole • aligns rewards with business strategies Strategic Pay Plans | 11-4 Copyright © 2014 Pearson Canada Inc. All rights reserved. • non-monetary (intrinsic)
5.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Employment Rewards Strategic Pay Plans | 11-5
6.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Total Rewards Strategic Pay Plans | 11-6
7.
Five Components of
Total Rewards 1. Compensation 2. Benefits 4. Performance and recognition 5. Development and career opportunities Strategic Pay Plans | 11-7 Copyright © 2014 Pearson Canada Inc. All rights reserved. 3. Work-life programs
8.
Basic Considerations in Determining
Pay Rates • • • • • Employment/Labour Standards Act Pay Equity Acts Human Rights Acts Canada/Quebec Pension Plan other legislation (worker’s comp., EI) • union influences • compensation policies • equity and its impact on pay rates Strategic Pay Plans | 11-8 Copyright © 2014 Pearson Canada Inc. All rights reserved. • legal considerations in compensation
9.
Establishing Pay Rates Stage
2: Conduct wage/salary survey Stage 1: Job evaluation Strategic Pay Plans | 11-9 reserved. Copyright © 2014 Pearson Canada Inc. All rights reserved Stage 3: Combine job evaluation and salary survey to determine pay
10.
Stage 1: Job
Evaluation • Benchmark job • critical to operations or commonly found in other organizations • Compensable factors • fundamental, compensable element of a job Strategic Pay Plans | 11-10 Copyright © 2014 Pearson Canada Inc. All rights reserved. A systematic comparison to determine relative worth of jobs within a firm.
11.
Job Evaluation Methods •
Classification/grading method categorizes jobs into groups grade/group description: outlines level of compensable factors required by each job • Point method • identify compensable factors • determine the degree to which each factor is present in each job Strategic Pay Plans | 11-11 Copyright © 2014 Pearson Canada Inc. All rights reserved. • •
12.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Grade/Group Description Sample Strategic Pay Plans | 11-12
13.
Point Method Steps Step
3: Assign points for each degree of each sub-factor Step 2: Determine factor weights and degrees Step 1: Preliminary steps Strategic Pay Plans | 11-13 reserved. Copyright © 2014 Pearson Canada Inc. All rights reserved Step 4: Evaluate the jobs
14.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Sub-Factor Sample Strategic Pay Plans | 11-14
15.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Point Method Job Evaluation Plan Sample Strategic Pay Plans | 11-15
16.
Stage 2: Conduct
a Wage/ Salary Survey • aimed at determining prevailing wage rates • avoid upward bias • informal surveys good for easily recognized jobs • formal surveys are most comprehensive Strategic Pay Plans | 11-16 Copyright © 2014 Pearson Canada Inc. All rights reserved. • determine rates for benchmark jobs • determine market rates for jobs • collect data on benefits, recognition programs, etc.
17.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Earnings Data Sample Strategic Pay Plans | 11-17
18.
Stage 3: Combine
Job Evaluation and Salary Survey Information • 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 Strategic Pay Plans | 11-18 Copyright © 2014 Pearson Canada Inc. All rights reserved. Wage curve
19.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Wage Curve Strategic Pay Plans | 11-19
20.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Pay Ranges Sample Strategic Pay Plans | 11-20
21.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Pay Ranges Sample Strategic Pay Plans | 11-21
22.
Reducing the number
of salary grades and ranges into just a few wide levels or “bands”, each of which then contains a relatively wide range of jobs and salary levels. advantage • greater flexibility in employee compensation Strategic Pay Plans | 11-22 Copyright © 2014 Pearson Canada Inc. All rights reserved. Broadbanding
23.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Broadbanding Strategic Pay Plans | 11-23
24.
Pay for Knowledge •
competency-based pay (managers, professionals) • pay-for-knowledge program should include: • competencies/skills directly important to job performance • new competencies that replace competencies that are no longer important • on-the-job training, not “in the classroom.” Strategic Pay Plans | 11-24 Copyright © 2014 Pearson Canada Inc. All rights reserved. • skill-based pay (manufacturing employees)
25.
Compensating Executives and Managers 1. 2. 3. 4. 5. Salary Benefits Short-term
incentives Long-term incentives Perquisites Strategic Pay Plans | 11-25 Copyright © 2014 Pearson Canada Inc. All rights reserved. Five elements:
26.
Compensating Professional Employees • engineers,
scientists, accountants, lawyers , etc. • difficult to measure economic impact to organization • market pricing approach commonly used Strategic Pay Plans | 11-26 Copyright © 2014 Pearson Canada Inc. All rights reserved. • compensable factors not easily measured: creativity, problem solving
27.
Pay Equity • wage
gap has narrowed but remains at 30% • aim is to provide equal pay to male and female-dominated job classes of equal value • must ensure no gender bias in job evaluation • long-term solution is to eliminate male and female- dominated jobs Strategic Pay Plans | 11-27 Copyright © 2014 Pearson Canada Inc. All rights reserved. • gap attributed to systemic discrimination
28.
reserved. Copyright © 2014
Pearson Canada Inc. All rights reserved Male-Female Wage Gap Strategic Pay Plans | 11-28
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