Guidelines for Compensation Management
Short Notes: Any fifteen 30
Compensation, Internal alignment, pay structure, Job
Analysis, Job evaluation, Job based,
Skill based and competency based structure, External Competitiveness, pay
levels, Pay form, pay for performance, merit pay, Broad banding, Pay grades, Red
Circled employee, Green Circled employee,
pay compression, Cost of living adjustment (COLA), Lump sum increases, Compa-ratio,
Profit Sharing, Stock ownership plan, Variable pay, piece rate compensation,
Questions: Any eight 40
1.
What is your definition of compensation? Which
meaning of compensation seems most . appropriate from an employee’s view: return,
reward or entitlement? Compare our ideas with someone with more experience,
someone from another field, someone out of job.
2.
Discuss the factors that influence internal pay
structure. Based in your experience, which one do you think moist important? Why?
( Hints: Economic pressure, Government policies, laws and
regulations, External stakeholders, Cultures & customs, Organizational
strategies, Organizations human capital, Organizations work design, Overall HR
policies, Internal labor market; COMBINING EXTERNAL & organizational
factors, Employees acceptances]
3.
Does compensation motivate behavior? Comment.
4.
Do people join a firm because of pay? Comment.
5.
Do people stay in a firm because of pay?
6.
Do employees perform better because of pay?
7.
You supervise in a firm that is low payer
relative to competitors? What things would you have to control over to increase
the likelihood that workers will feel fairly treated?
8. Does variable pay improve performance? Why?
9.
According to a 2010 study by economists Angus Deaton and Nobel Prize winner and
psychologist
Daniel
Kahnerman, “High incomes doesn’t bring you happiness . . . . [T]he further
a
person’s household income falls below $75,000, the unhappier he or she is. But
no matter
how
much more than $75,000 people make, it doesn’t bring them any more joy.” Do you
agree?
Explain.
10.
Several companies are moving in the direction of compensating employees with
nonmonetary
rewards
in lieu of higher wages. Why do you think this is happening? Do you think
this
is a good thing for companies and employees? Explain.
11.
In a feisty response to critics who accuse Wal-Mart of providing poverty-level
wages
(around
$9.68 an hour, on average) and few benefits, Wal-Mart chief executive H. Lee
Scott,
Jr., said Wal-Mart offered good, stable jobs, noting that when it opens a
store, more
than
3,000 people often apply for 300 jobs. “It doesn’t make sense,” Mr. Scott said,
“that
people
would line up for jobs that are worse than they could get elsewhere, with fewer
benefits
and less opportunities.” 81 Based on
what you learned in this chapter, do you agree
with
Mr. Scott’s assessment? Explain.
12.
One observer argues that external equity should always be the primary concern
in compensation,
noting
that it attracts the best employees and prevents the top performers from
leaving.
Do
you agree?
13.
What are the main problems a small family-owned firm is likely to encounter
when
designing
a compensation system that involves both family and nonfamily employee?What are
the guidelines to be followed? Explain.
14.
Fixed or secure pay is becoming rare. What impact do you think this has on
employees’ outlook? What, if any, are the negative and positive aspects of this
trend? Explain.
15.
Do you think a company should keep pay secret and demand that all employees not
disclose
their pay to coworkers?
Why or why not?
16. Do minimum pay law
help society? Why or why not? Do current minimum wage rate at Garment Industry
of Bangladesh is set at right level? If not. What should be the minimum wage
rate?
17. What things other
than compensation might encourage you to have a long career with an
organization?
18. Why would an
organization choose to pay higher wages than the wages paid by the competitors?
19. Different
methods of wage payment, calculation, advantaged, disadvantage.
Case Study: Any one 25
Case Study
Mountain States University is a
medium-sized public university with 21,000 students and 1,200 faculty members.
The College of Business Administration is the largest one on campus, with 8,000
students and 180 faculty members. For the past few years, the dean has had to
deal with a large number of dissatisfied faculty who complain that they are
underpaid relative to newly hired faculty. Many of the complainants are senior
tenured professors who refuse to engage in committee activities beyond the
minimum service requirements and who are seldom in their offices because they
feel aggrieved. They teach six hours a week, spend two hours in the office, and
then disappear from campus. Recently, the head of the college’s faculty council
compiled some statistics and sent these to the dean, demanding “prompt action
to create more equity in the
faculty pay structure.” The average
salary statistics are shown in the table on the following page.
The dean replied that he has little
choice but to make offers to new faculty that are competitive with the market
and that the university will not give him enough funds to maintain equitable
pay differences between new and current faculty or between higher and lower
ranks.
1995 2002
Rank New Hires Current New Hires Current
Full
professors $68,000 $56,000
$79,000 $62,000
Associate
professors $62,000 $51,000 $73,000 $61,000
Assistant
professors $52,000 $48,000 $61,000 $59,000
2009 NOW
Rank New
Hires Current New Hires Current
Full
professors $99,935 $76,217 $120,000 $85,000
Associate
professors $92,345 $70,797 $ 98,000 $77,000
Assistant
professors $80,644 $69,443 $ 88,000 $71,000
Critical
Thinking Questions
1.
Based on the data collected by the faculty council, name three compensation
problems that exist at Mountain States University.
2. Is
the dean’s explanation for decreased pay differences by rank and/or seniority
justifiable?
3.
How would you suggest the dean deal with senior faculty who feel underpaid?
Case
Study:
Scripps
Health is a long-standing and prominent nonprofit health-based organization
that is based
in
the greater San Diego area. The organization experienced a severe financial downturn
that led
to
increased employee discontent and turnover, as well as the exit of the firm’s
CEO. In an effort to
fix
these problems, CEO and President Chris Van Gorder implemented a new strategic
plan that was
used
to enhance how the employees were treated. The new strategic plan contained
several components
that
encouraged employees to work more effectively in their jobs. For example,
administrators
were
to utilize a more participatory leadership approach to create “buy-in” among
staff members,
and a
natural extension of this approach was the development of a physician
leadership cabinet that
improved
how personnel interacted with each other, and that strengthened firm
coordination through
widespread
communication. Top managers also focused on improving individual satisfaction
and
productivity
by enhancing work efficiency levels. A major part of these more streamlined
operations
stemmed
from implementation of a beneficial performance management plan. In particular,
this
plan
outlined how managerial talent would be developed, employees would be
recognized for a job
well
done, and motivation would be orchestrated through a competitive compensation
approach.
Reorganizing the compensation policies of the organization was one
of the primary areas targeted
for improvement by the firm’s leadership. Part of this redesign
process involved periodic reviews of
job content, the use of annual appraisals to enhance communication,
and the assessment of experience
and education to properly adjust compensation amounts. Further,
the organization strives to offer
competitive compensation that rests at the 65th percentile
of the relevant labor markets, which positions
the firm squarely in the middle between the top and bottom levels
of competitive compensation.
The company also tests the pay markets twice a year so that it can
remain competitive with regard
to compensation. Finally, workers can tap into extra money based
on ratings given vis-à-vis the annual
performance appraisal sessions; if employees do well on their
performance reviews, they can earn as much 5% of their salaries as merit-based
compensation.
QU E S T I O N S
1. Discuss how this case illustrates how compensation can be used
as a method for improving
employee satisfaction and motivation.
2. Identify some of the ways that performance based pay systems
should be developed based
on the experiences at Scripps Health.
কোন মন্তব্য নেই:
একটি মন্তব্য পোস্ট করুন