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Chapter 11

MHR 523 Chapter Notes - Chapter 11: Total Rewards, Hay Group, Pension


Department
Human Resources
Course Code
MHR 523
Professor
Margaret Yap
Chapter
11

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Chapter 11 – Strategic Pay Plans
Total rewardsintegrated package of all rewards: monetary, non-monetary, extrinsic, and intrinsic
Alignmentextent to which rewards support outcomes that are important to the organizations
strategic objective
The five components of Total Rewards
Compensation – includes direct financial payments
Benefitsincludes indirect payments; example: employer paid vacations
Work/Life programsflexible scheduling, child care etc.
Performance and recognition – pay for performance
Development and career opportunitiesplanning for advancement or change in responsibilities
Purpose of Total Rewards
Attract, retain, and motivate/engage employees
Engagementpositive emotional connection to employer and a clear understanding of strategic
significance of the job
Basic considerations in determining pay rates
1. Legal considerations in compensation
a.Employment/Labour Standards Actsset minimum standards regarding pay
b. Pay Equity Acts – pay for female-dominated jobs that are equivalent to male-dominate
jobs must be increased to the pay level of the comparable male-dominated jobs
c.Human rights acts
d. Canada/Quebec pension plan
e.Othereach province/territory/federal govt. has its own workers compensation laws
2. Union influences in compensation decisions
3. Compensation policies: usually written by the HR or compensation manager in conjuction with
senior management
4. Equity and its impact on pay rates: internal and external equity is crucial
ESTABLISHING PAY RATES
Stage one: Job evaluation
Aimed at determining a jobs relative worth
Focuses on benchmark jobs (ones that are critical to the firms operations, or commonly found in
other organizations)
Compensable factors:
oMost of the pay equity acts in Canada focus on:
Skill
Effort
Responsibility
Working conditions
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