ADM 3337 Chapter Notes - Chapter 13-Appendix: Takers, Life Insurance, Vater Percussion
6 Dec 2016
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Compensation issues: (1) managing labor costs, (2) variable pay as a cost control, (3) inherent controls, (4) communication & (5) structuring the compensation function. Adm3337 chapter 13: compensation budgets & administration (4 pages) Cost implications (updating pay structure, merit increases, gain-sharing proposals) are critical for making sound decisions. Financial planning requires understanding the potential returns gained from its allocation. Managing pay must been the objectives in the pay model: (1) efficiency, (2) fairness & (3) compliance. 3 main factors to control to manage labor costs: (1) employment, (2) average cash compensation & (3) average benefit costs. Labor costs = employment (number of workers x hours worked) x (average cash compensation + average benefit cost) Organizations often reduce their workforce to cut labor costs (layoffs with severance benefits &/ exit incentives to encourage employees to leave by choice ) If workforce reductions can be targeted based on performance, stronger performers won"t be affected & organization can maintain good relations with them.
