Strategic_Compensation_and_Bases_for_Pay

Strategic Compensation and Bases for Pay Juanita C. Murphy Professor James G. Ziegler, Ph.D. Compensation Management-BUS 409 January 29, 2011 Describe the three main goals of compensation departments. The three main goals of compensation departments are internal consistency, market competitiveness, and recognition of individual contributions. Internal consistency means the importance of the job value per job description. An example would be having two people with different qualifications and skills, internal consistency compensation systems make it so that they require different financial benefits. Internal consistency is broken up into two different extensions. Those extensions are job analysis and job evaluation. Job analyzing is putting the best important together about the job in description form. That information is usually what the job entails, what the requirements expected are, and the working conditions. The last branch is the job evaluation. Job evaluation helps managers to compensation each employee appropriately based on work performance, for their individual pay scale. Market competitive causes companies to gain the interest of the best of the best employees and ways of keeping them satisfied. One way to keep an employee happy is to pay them what they are worth. When a company is able to retain employees that are beneficial to the company then the company is looking at longevity from that employee. It will keep unnecessary money from being spent by the company such as posting ads for job openings and training. Two ways to make a market competitive pay system work is strategic analysis and compensation surveys. Strategic analysis helps a company how where they stand in regards to their competitors. In order for a company to know where they stand they need to do compensation surveys. It helps to know what your competitors are pay their employees and the benefits they receive, so the company can stay in competition with them in not trying to lose your most valuable employee. Lastly is recognizing individual contributions through pay structures, grades and ranges. Great pay structures help alleviate high turnover rates, and under the pay structure falls the pay grades and ranges. Describe the contextual influence that you believe will pose the greatest challenge and the contextual influence that will pose the least challenge to companies’ competitiveness and explain why. If I’m understanding the question correctly, I think that pay discrimination is the greatest challenge. The least challenge will be family and medical leave act. I feel that the equal pay will pose a challenge in competitiveness because a lot of women feel that they are not paid equally to men. When someone is not paid what they are worth and equally then they will go to another company. Every company has to follow the family and medical leave act. If the rules and regulations are followed by both the employee and employers then it will be a smooth transaction. Describe when subjective performance evaluations might be better (or more feasible) than objective ratings. An objective rating refers to more of measureable quantity, such as how many cars a salesperson sold for a week. This is a fixed way of evaluation the performance of an employee. The employee will have nothing else to fall back on in regards to their evaluation. Subjective performance is about the quality of the work performed. So instead of a sales person being evaluated on the amount of cars they sold, they are being evaluated on the satisfaction of the customer service provided. With subjective performance evaluation you are really being observed and your character is being examined. To me it is a lot easier to say a salesperson sold 10 cars verse taking the time to see how he or she was able to sell those cars. But in the one source that I did use, I would ultimately see it being feasible to use both for an evaluation. Describe under what conditions profit sharing plans are not likely to motivate employees. Profit sharing doesn’t motivate employees because from my understanding, if the profits are low then the pay for employees is low. If an employee is not making the money that they are use to making then they may go to another company. Not knowing what you are going to make on a day to day basis can be frustrating, because the employees living conditions are lacking security. There is no way that an employee can be motivated and still love their job without proper financial security. Based on your knowledge of pay-for-knowledge pay concepts, describe three jobs for which this basis for pay is inappropriate and explain why. If I am correct, this pay concept is about getting paid by how much you know about your job. So the inappropriate jobs would be the ones that don’t require too much knowledge. One job would be a cashier. A cashier has standard knowledge of their job. It only consist of ringing up items, helping customers and taking their money after the transaction. This is done repeatedly and every day. The second job is a janitor. All a janitor does is vacuum, take out trash, clean windows and etc. A car detailer doesn’t have to have a certain amount of knowledge when it comes to cleaning a car inside and out. Being that these jobs are needed, they require very little skills and talents. With these jobs you will always have someone that will manage your day. There is very little advancement, and knowledge is not needed promotion it is then based on seniority. In these positions, if you don’t want to learn anything extra then you don’t have to. A job such as being a doctor would benefit from the pay for knowledge pay system. The more you know the more you will get paid. This is a career that means you will have to always show your talents and abilities. References: Martocchio, J. J. (2011). Strategic compensation: A Human Resource Management Approach: 2011 custom edition (6th ed.). Upper Saddle River, NJ: Prentice Hall. Chapter 1-5 http://www.ehow.com/about_6816595_objective-vs_-subjective-performance-evaluations.html