hrmreflection4
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HRM311Week4student.pptxHRM 311 – Week 4
Nature Of Total Rewards and Compensation
Total rewards: Monetary and non-monetary rewards provided to attract, motivate, and retain employees
Strategic decisions that guide the design of compensation practices:
Legal compliance with all applicable laws and regulations
Cost-effectiveness for the organization
Internal and external equity for employees
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Nature Of Total Rewards and Compensation
Legal compliance with all applicable laws and regulations
Cost-effectiveness for the organization
Internal and external equity for employees
Optimal mix of compensation components
Performance enhancement for the organization
Performance recognition and talent management for employees
Enhanced recruitment, involvement, and retention of employees
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Components of Compensation
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Common Overtime Issues
Compensatory time off
Incentives for non-exempts
Training time
Travel time
Donning and doffing time
Common Overtime Issues
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Market Competitive Compensation
Market Competitiveness and Compensation
Meet-the-market strategy
Lag-the-market strategy
Lead-the-market strategy
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Job Evaluation Methods
Job Evaluation Methods
Point factor Method
Ranking Method
Classification Method
Factor-Comparison Method
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Job Evaluation Methods
Advantages
Disadvantages
Ties organizational pay levels to the external job market, without internal job evaluation distortion
Communicates to employees that the compensation system is market linked
Relies on market survey data
A specific job may differ from a matching job in the survey
Market data’s scope is a concern
Tying pay levels to market data can lead to wide fluctuations
Standardized Pay Adjustments
Standardized Pay Increases
Seniority
Cost-of-Living Adjustments (COLA)
Across-the-Board Increases
Lump-Sum Increases (LSI)
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Individual Incentives
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Design of Group/Team Incentive Plans
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Employee Stock Plans
Stock option plan
Employees can buy fixed number of shares of company stock
At a specified price for a limited period of time
Employee stock ownership plan (ESOP)
Gives employees significant stock ownership in the organization they work
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Types of Sales Compensation Plans
Salary-only
All compensation is paid as a base wage with no incentives
Straight commission
Compensation is computed as a percentage of sales in units or dollars
Draw system makes advance payments against future commissions to the salesperson
Salary-plus-commission or bonuses
Compensation is part salary for income stability and part commission for incentive
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Benefits
Indirect reward given to an employee or group of employees for organizational membership
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Benefits
Benefits and HR Strategy
Benefits approach adopted as part of total rewards depends on many factors, such as:
Size of the organization
Workforce competition
Organizational life cycle
Employee demographics
Corporate strategic approach
Employees’ life stages
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Benefits as a Competitive Advantage
Benefits are offered to:
Aid recruiting and retention
Improve organizational performance
Meet legal requirements
Reinforce the company philosophy of social and corporate citizenship
Benefits Management Components
Benefits design
Benefits administration
Technology administration
Benefits measurement
Cost control efforts
Communication to employees
Benefits Administration and Technology
Open enrollment: Time when employees can change their participation level in various benefit plans and switch between benefit options
Outsourcing benefits administration
Many organizations must make coordinated efforts to administer benefits programs
Third-party administrators (TPA): Vendor that provides administrative services to an organization
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Security Benefits
Types of Security Benefits
Workers’ Compensation
Unemployment Compensation
Severance Pay
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Retirement Plan
Retirement program established and funded by the employer and employees
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Types of Retirement Plans
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Insurance Benefits
Common Types of Insurance Benefits
Life insurance
Typical level of coverage is one and one-half or two times an employee’s annual salary
Disability insurance
Provide continuing income protection for employees who become disabled and are unable to work
Long-term care insurance
Allow employees to purchase insurance to cover costs for long-term health care in a nursing home, an assisted-living facility, or at home
Legal insurance
Employees (or employers) pay a flat fee for a fixed number of hours of legal assistance each month
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Family-Care Benefits
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