MGT 462 Lecture Notes - Lecture 1: Total Rewards, Telecommuting, Savings Account
Document Summary
There is no single right way to pay an employee. Compensation is both an art and a science. Pay is rarely the root of voluntary turnover. What you pay is important, but so is how. Both positively and negatively and the results affect the organization"s success. Business strategy > human resource strategy > compensation strategy. Using stock to pay employees creates a sense of ownership and improve performance. Aligning/linking executive pay to company performance supposedly increases stockholders" returns. 82% or 90% if there is the same education. Incentive effect - degree to which pay influences individual and aggregate motivation among the employees; extra effect, persistence, intensity (prospective) Sorting effect - affect that pay can have on the composition of the workforce; who applies, who stays and who self-select out. P = f (m + a + o) Performance = function of motivation + ability + opportunity.
