Week 1 Project

Salary Structure

Employee compensation will ultimately be a managerial decision. As a line manager, your focus will be on the broader issues of production, revenue, and competition; however, the rate at which employees are paid—and why—will be an important factor in sustaining high levels of production, revenue, and competitive advantage. In making these decisions, line managers and HR professionals (and in many cases the compensation specialist within the HR department) must work together in order to reward employees on measurable accomplishments and effectively communicate how the measured performance led to the resulting compensation decision.

The HR professional is tasked with ensuring equity in terms of the salary structure. To do so, the individual must be knowledgeable of the following pay options: seniority and longevity pay, merit pay, incentive pay, and person-focused pay. Seniority pay rewards employees with an increase in pay for being on the job for a speci�ed length of time, while enhancing their skills through training/seminars, education, and on-the-job training. Employees receive merit pay on the basis of their performance. Incentive pay is awarded when an employee meets a particular goal for the organization. Lastly, person-focused pay is based on three guidelines: pay for knowledge, skill-based pay, and competency-based pay. In addition, there must be �rm policies in place, and salaries should be tied to job descriptions and performance evaluations. By doing so, the HR professional creates an equitable pay system to attract and retain employees in accordance with the organization’s business objectives.

Compensation Strategy

Bene�ts

Total Rewards Review each tab to know more.

Description: The organization’s compensation strategy should be competitive and within budget.

Example: Salary, incentives (monetary or nonmonetary), and bene�ts.

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Work Life

Monetary Incentives

Nonmonetary Incentives

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Additional Materials

From your course textbook, Strategic Compensation: A Human Resource Management Approach, read the following chapters:

Traditional Bases for Pay: Seniority and Merit

Incentive Pay

Person-Focused Pay

From the South University Online Library, read the following articles:

The Development of a Model for the Distribution of Merit Pay Increase Monies for Municipal Agencies: A Case Study (https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp? sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx? direct=true&db=eue&AN=90248814&site=eds-live)

A Framework for Compensation Plans with Incentive Value (https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp? sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx? direct=true&db=eue&AN=24237460&site=eds-live)

Is It Worth It to Win the Talent War? Evaluating the Utility of Performance-Based Pay (https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp? sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx? direct=true&db=pbh&AN=11788018&site=eds-live)

Winning Support for Organizational Change: Designing Employee Reward Systems That Keep on Working (https://www.thecampuscommon.com/library/ezproxy/ticketdemocs.asp? sch=suo&turl=http://search.ebscohost.com.southuniversity.libproxy.edmc.edu/login.aspx? direct=true&db=rch&AN=20342560&site=eds-live)

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