Employee Compensation Direct or Indirect compensation is given based on: ◆Increments of time o Hourly o Salaried ◆Performance o Piecework o Commission ©2004 by UIBE Liu yuxin 8-6
© 2004 by UIBE Liu yuxin 8-6 11-6 Employee Compensation Direct or Indirect compensation is given based on: Increments of time Hourly Salaried Performance Piecework Commission
Factors Influencing Pay Legal considerations Company policy Competitive strategy Equity ©2004 by UIBE Liu yuxin 8-7
© 2004 by UIBE Liu yuxin 8-7 11-7 Factors Influencing Pay Legal considerations Company policy Competitive strategy Equity
Corporate Policies and Competitive Strategy To remain competitive,compensation plans must reward strategy that furthers the firm's strategy aims by asking: 1.What are our key competitive success factors? 2. What actions implement this competitive strategy? 3.What compensation program reinforces those behaviors? 4. What requirement should each pay element meet? 5.How well do the current reward programs match these requirements？ ©2004 by UIBE Liu yuxin 8-8
© 2004 by UIBE Liu yuxin 8-8 11-8 Corporate Policies and Competitive Strategy To remain competitive, compensation plans must reward strategy that furthers the firm’s strategy aims by asking: 1. What are our key competitive success factors? 2. What actions implement this competitive strategy? 3. What compensation program reinforces those behaviors? 4. What requirement should each pay element meet? 5. How well do the current reward programs match these requirements?
Important Policy Issues In writing the pay plan,ask the following: 1.Will we be a pay leader or a follower? 2.Will we emphasize seniority or 50 performance? 24% 22% 3.What pay cycle? ■Weekly ■Biweekly 49% ■2 x monthly ■Monthly ©2004 by UIBE Liu yuxin 8-9
© 2004 by UIBE Liu yuxin 8-9 11-9 Important Policy Issues In writing the pay plan, ask the following: 1. Will we be a pay leader or a follower? 2. Will we emphasize seniority or performance? 3. What pay cycle? 24% 5% 22% 49% Weekly Biweekly 2x monthly Monthly
Important Policy Issues 4.How do we fix salary compression? 5.How should we compensate based on geography or overseas employees? 6.Is the pay rate equitable with rates in other organizations outside the firm? ©2004 by UIBE Liu yuxin 8-10
© 2004 by UIBE Liu yuxin 8-10 11-10 Important Policy Issues 4. How do we fix salary compression? 5. How should we compensate based on geography or overseas employees? 6. Is the pay rate equitable with rates in other organizations outside the firm?