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26 Pages

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COMM 410

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COMM 392 Managing The Employment Relationship Danielle van Jaarsveld 2014 Class 11 Course Schedule Introduction to The Employment Relationship Weeks 1 & 2 Legal Regulation of The Employment Relationship Weeks 2 & 3 Recruitment and Selecting Employees Weeks 4 & 5 Employee Compensation and Benefits Weeks 6 & 7 Unions and Collective Bargaining Weeks 8 Managing Employee Performance Week 9 Discipline and Fairness in the Workplace Weeks 10 & 11 THE UNIVERSITY OF BRITISH COLUMBIA Objectives •  Identify factors that influence pay rates •  Understand key steps involved in designing compensation systems •  How to recognize employee contributions THE UNIVERSITY OF BRITISH COLUMBIA Compensation •  All forms of financial returns and tangible services and benefits employees receive as a part of employment relationship Total Compensation Direct Financial Indirect Employee $$$ Long-term Benefits Base Work-Life Pay IncentiveIncome Protection Balance Merit/Cost Short-term (insurance, of Living pensions) Allowances Incentives 4 THE UNIVERSITY OF BRITISH COLUMBIA Key Consideration in Determining Pay Rates/Compensation Systems Equity considerations •Person compares the ratio of their inputs to outcomes with comparison others’ ratio Internal equity – within organizations External equity – across organizations (e.g., those holding similar jobs in other firms) •Think University THE UNIVERSITY OF BRITISH COLUMBIA Determining Wage/Salary Levels 1. Conduct a Wage/Salary Survey – How? (p. 250-259) •Use network, government statistics, review ads, professional association reports, etc. THE UNIVERSITY OF BRITISH COLUMBIA 6 Determining Wage/Salary Levels 2. Determine the relative worth of each job (“job evaluation”) •  Benchmark key positions and compare jobs to one another based on content •  Evaluate according to compensable factors such as skill, effort, responsibility, working conditions •  Use job evaluation techniques such as ranking method (simplest), grading method, or point methoTHE UNIVERSITY OF BRITISH COLUMBIA 7 Job Evaluation: Point Method Job: Bookstore manager Compensable Factors Degree x Weight = Subtotal Skill (40%) Mental X 20% = 80 Experience X 20% = 60 Effort (30%) Physical X 15% = 30 Mental X 15% = 60 Responsibility (20%) Effect of error X 10% = 40 Inventiveness/Innovation X 10% = 30 Working Conditions (10%) Environment X 5% = 5 Hazards X 5% = 5 Total 310 THE UNIVERSITY OF BRITISH COLUMBIA 8 Determining Wage/Salary Levels 3. Group similar jobs into pay grades-jobs of approximate equal value 4.  Price each pay grade 5. Fine tune pay rates THE UNIVERSITY OF BRITISH COLUMBIA 9 Pay-for-Performance (Variable Pay) •  Pay that varies with some measure of individual or organizational performance – in pairs - which one of these would you prefer, why? Payment Typical Performance method frequency of measures payment Merit pay Change in base Annually Supervisors’ appraisal of pay individual performance Profit sharing Bonus Semianually or Company profit annually Gainsharing Bonus Monthly or Production or controllable quarterly costs of work unit Stock ownership Equity changes When stock sold Company stock returns THE UNIVERSITY OF BRITISH COLUMBIA Merit Pay •  Annual pay increases linked to performance appraisals Performance Evaluation Annual salary increase Superior 10% Commendable 7% Competent 4% Needs improvement 2% Unsatisfactory 0% (p. 271-273) •  Requires well-developed performance appraisal system THE UNIVERSITY OF BRITISH COLUMBIA Pay for Performance •  Unintended consequences – are we rewarding right behaviour? •  Sears Auto Service in the 90’s •  May not fit well with a team approach •  Becomes part of the culture – expected – think Investment Banks and AIG Insurance THE UNIVERSITY OF BRITISH COLUMBIA AIG Insurance •  September 16, 2008 – US Federal Reserve Bank announced loan (bail- out) of US$85 billion, to prevent company's collapse •  March 2, 2009 - Reported
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