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ADMS 2600 (99)


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York University
Administrative Studies
ADMS 2600
Monica Belcourt

COMPENSATION refers to all rewards that individuals receive in return for their labour INTRODUCTION A) Financial Compensation direct: pay in the form of wages, salaries, bonuses and commissions ($$) indirect: refers to financial-related benefits received: - insurance plans: life, health, dental, vision etc. - social assistance benefits: company’s contribution to - employee services, educational assistance, retirement plans, employment insurance, workers’ compensation - paid absences: vacations, holidays, sick leave, etc. B) Non-financial Compensation job related: interesting duties, challenge, responsibility, opportunity for recognition, feeling of achievement, advancement opportunities job environment related: competent supervision, congenial workers, comfortable working conditions, flexibility in work schedule (flextime, reduced workweek, telecommuting) COMPENSATION MANAGEMENT the goals are to manage a company’s compensation program in a cost-effective manner - to be effective - must be “fair” “fairness” is a two-way street: - pay must be adequate for the demands and requirements of the job - otherwise if employees perceive an imbalance in relation to the efforts to the reward, they will act to correct the inequity (motivation: reduced productivity, absences, etc.) Considerations in compensation management: • level of responsibility -> linked to required skills, education, experience • the economy: economic cycles lead to fluctuating demands for wages and salaries • legislation: - minimum wage - overtime compensation (e.g. time-and-a-half) [in time or in pay] - pay equity: 1) equal pay for equal work and 2) equal pay for work of equal value • job evaluation: - the process of determining the value of each job in relation to other jobs in the organization (as determined through job analysis) — includes: - description of duties
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