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Lecture 5

ADM2337 Lecture 5: Untitled5

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University of Ottawa
Catherine Elliott

Total rewards part 1 (managing compensation) March 7, 2017 10:13AM Managing compensation ; - An intergrated package of all rewards- Mix( monetary, non monetary; extrinsic and intrinsic) 
 - To attract, retain and engage employees 
 - Aligned to company's strategy ; provide value 
 - Direct: wages and salaries (chapter 9) incentives, Bonuses, commissions (chapter 10) 
 - Indirect: employee benefits(chapter 11) 
 1. Employee recognition 
 2. Work life balance 
 3. Career development programs 
 Legal requirements - Human rights legislation 
 - Pay equity 
 - Employment labour standards 
 Pay fairness Figure 9.1 
 Expectancy theory 
 - What does expectancy theory tell us about pay? 
 - Employees should exert greater work effort if they have reason to expect that it will result in a 
 reward (outcome) that they value 
 Determining compensation - the wage mix Figure 9.2 
 - External factors
 ○ Labour factors Supply and demand for labour within an area Other forces to consider (e.g, collective agreement; gov't reg) ○ Area wage rates Wage structure needs to be in line with local wages ○ Cost of living Based on consumer price index (CPI) "escalator clauses"? COLA Determining the worth of jobs (stage 1) - The systematic process of determining the relative worth of jobs in order to establish which jobs should be paid more than other within an organization 
 - Ensures internal equity 
 1. Jobs ranking systems - Jobs are ranked on the basis of their relative worth 
 - e.g, restaurant - cashier/ server, cook manager 
 2. Job classification system - Jobs are classified and grouped according to aseries of predtermined wage grades 
 - Wage grades have increasing amounts of skill, knowledge ability, or other factors 
 - All jobs are then compared to descriptions of job classes 
 - Each job is "slotted" into the appropriate grade 
 Ex: federal govt, UBC 
 3. Point system 
 ADM 2337 Page 13 3. Point system - Permits to be evaluated quantitatvely on the basis of factors or elements- compensable 
 factors- that constitute the job 
 - E.g., Government of Alberta, Manitoba 
 - Factors could be; skills, experience, effort, responsibility, job conditions, supervisory 
 responsibility. The point manual 
 - Contains a description of the compensable factors and the degrees to which these factors may exist within the jobs 4. Work - A job evaluation system that seeks to measure a job's worth through its value to the 
 - Valued relative to standard associated with financial, operational, or customer service 
 objectives of the organization- rather than internally applied points 
 - End up with hierarchy 
 - How do they contribute to overall success - 
 Conduct a wage/ salary survey (external) 2 
 - A survey aimed at determining prevailing wage rates for comparable jobs - Used to:
 Determine pay rates for benchmark jobs (e.g., 10-15) Gather info on total rewards
 Ensure external equity - Methods?
 Salary sueveys- employer intiated; or external Determining pay for jobs step 3 - Develop a wage curve- assi
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