BU121 Lecture Notes - Canada Labour Code, Collective Bargaining, Canadian Labour Congress

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26 Mar 2013
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BU121 Week 11 Lecture 1
Determining Compensation
Objectives
o Attract, retain, and motivate
Attract people: have to be sure compensation package is competitive
Retain people: don’t lose them because they are unhappy with their pay
Motivate people: work harder to get more pay
o External and internal equity, and incentives
External equity = attracting (look at competition, what other firms pay)
Internal equity = retaining employees look at what other people within
the company are being paid, internal equity is harder to achieve
Internal equity - Job Evaluation
o Develop rating system
has to be applied to the jobs
o Use job analysis to rate jobs
looking at job specifications/descriptions
Performance evaluation: evaluation in a person
o Assign pay based on relative value - Price the Pay Structure
similar value rate
Point Method
o universal factors
Skill, Effort, Responsibility, Job Conditions
want them to perceive equity, to make sure pay is fair
What aspects of skill are important to your company and pay different
according to different levels
o Sub-factors Degrees Point values Pay grades
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Document Summary

Attract people: have to be sure compensation package is competitive. Retain people: don"t lose them because they are unhappy with their pay. Motivate people: work harder to get more pay: external and internal equity, and incentives. External equity = attracting (look at competition, what other firms pay) Internal equity = retaining employees look at what other people within the company are being paid, internal equity is harder to achieve. Internal equity - job evaluation: develop rating system. Has to be applied to the jobs: use job analysis to rate jobs looking at job specifications/descriptions. Performance evaluation: evaluation in a person: assign pay based on relative value - price the pay structure . Want them to perceive equity, to make sure pay is fair. What aspects of skill are important to your company and pay different according to different levels: sub-factors degrees point values pay grades. Have a degree measurement of each and assign a point value.

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