SMO416 Chapter Notes - Chapter 4: Job Evaluation, Profit Sharing, Piece Work

• School: University of Alberta
• Department: Strategic Management and Organization
• Course: SMO416
• Professor: Rick Brick

Document Summary

Indirect pay for about 15% of total compensation. Base pay: wages, salary, why use base pay, easy to measure, easy to price in terms of its value to the employer, easy to attribute to individual employees, controllable by the individual employee, relatively stable. Job evaluations still substantially subjective process: can inhibit change, flexibility and skill development, more costly to develop and maintain than. If not rotated through jobs regularly, then skills atrophy. Disadvantages: relatively high failure rate, more fixed employer commitment, does not directly motivate task behaviour, nor signal key task behaviours, does not directly contribute to citizenship behaviour, not self-correcting. Performance pay: any type of financial reward provided only when certain specified performance results occur, results may be based on the performance of individual employees, a group or team of employees, or the entire organization. Individual performance pay plans include piece rates, commissions, merit pay, and targeted incentives.