MHR 523 Chapter Notes - Chapter 9: Profit Sharing, Canada Labour Code, Prevailing Wage
28 Jun 2018
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MHR Chapter 9 - Compensation Management
Compensation is the cash and non-cash rewards employees receive in exchange for
their work
Employees are more likely to be satisfied and motivated to contribute to the
achievement of organizational objectives
Compensation programs help to maintain an organization’s human resources
Job evaluations - systematic process of assessing job content and ranking jobs
according to a consistent set of job characteristics and worker traits
Identifies which jobs should be paid more than others
Job ranking - a form of job evaluation in which jobs are ranked subjectively
according to their overall worth to the organization
Lack precision, pay levels inaccurate
Job grading - a form of job evaluation that assigns jobs to predetermined job
classifications according to their relative worth to the organization
More sophisticated than ranking, not very precise
Point system - form of job evaluation that assesses the relative importance of the
jobs key factors in order to arrive at the relative worth of jobs
Difficult to develop, more precise
Six steps to implement
1. Determine compensable factors
2. Determine levels of factors
3. Allocate points to sub factors
4. Allocate points to levels
5. Develop the point manual
6. Apply the point system
Internal equity - perceived equity of a pay system in an organization
External equity - perceived fairness in pay relative to what other employers are
paying for the same type of work
Wage and salary surveys - studies made of wages and salaries paid by other
organizations within the employer’s labour market
Analysts can not be sure their jobs match those reported in the survey
Key job - a job that is similar and common in the organization and its labour market
Compensation analysts find it more convenient to lump jobs together into job
classes
Rate range - a pay range for each job class
Merit raise - a pay increase given to individual workers according to an evaluation
of their performance
Challenges affecting compensation
Prevailing wage rates
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Compensation is the cash and non-cash rewards employees receive in exchange for their work. Employees are more likely to be satisfied and motivated to contribute to the achievement of organizational objectives. Compensation programs help to maintain an organization"s human resources. Job evaluations - systematic process of assessing job content and ranking jobs according to a consistent set of job characteristics and worker traits. Identifies which jobs should be paid more than others. Job ranking - a form of job evaluation in which jobs are ranked subjectively according to their overall worth to the organization. Job grading - a form of job evaluation that assigns jobs to predetermined job classifications according to their relative worth to the organization. More sophisticated than ranking, not very precise. Point system - form of job evaluation that assesses the relative importance of the jobs key factors in order to arrive at the relative worth of jobs.
