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Canada (161,966)
York University (12,849)
HRM 3490 (10)
Ping Peng (10)
Chapter

Strategic Framework for Compensation

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Department
Human Resources Management
Course
HRM 3490
Professor
Ping Peng
Semester
Fall

Description
Chapter 2 Strategic Framework for Compensation The Concept of Fit - The success or failure of any reward system depends on how well it fits the organizational context and total organizational system. Organization as a System Contingency Approach to Organization Design o Premise that the best type of structure for an organization depends on the key contingences (contextual variables) associated with that organization:  Type of environment in which organization operates  The type of technology it uses  The size of the organization  The nature of the people employed Structural Variables  Reward system o Compensation system  Job Design o The manner in which the total amount of work to be done is divided into subtasks that can be handled by individual workers  Coordination and departmentation mechanisms o The methods used to ensure that the work of individual employees fits together such that the overall task is accomplished  Decision making and Leadership Structure o The mechanisms through which the organization’s decisions are made and the type of leadership role played by those in managerial positions  Communication and Information Structure o The methods used to communicate information throughout the organization and the amount and kinds of information to be transmitted. Contextual Variables - Factors in the firm’s context that indicate the most appropriate managerial strategy and organizational structure. - The key point about contextual variables is that a change in any of them may trigger a need for a change in the reward system Domain – describes the specific products or services offered by a given organization Task environment – the portion of the general environment that has direct relevance to a give organization  Organization’s Environment  Corporate Strategy  Technology  Size  Workforce Managerial Strategies Classical Managerial Strategy - An approach to management that assumes most employees inherently dislike work but can be induced to work in order to satisfy their economic needs - Thinking is completely separated from doing - Jobs are designed with only a few basic elements so they can be supervised closely and so that employees can be replaced easily if they quit or are dismissed. - Jobs are arranged in strict, hierarchical, pyramidal fashion because of the overriding need for accountability. Human Relations Managerial Strategy - An approach to management that assumes most employees inherently dislike work but can be induced to work in order to satisfy their social needs - Paternalism – the organization is like a family, in which employees are like children who need to be treated kindly but firmly by a benevolent employer who knows what is best for them and the organization - Arranges jobs to allow social interaction among employees - The role of then leader is controlling but employee orientated - Rewards that are mainly extrinsic and focus on loyalty to the organization High Involvement Managerial Strategy - An approach to management that assumes that work can be intrinsically motivating if the organization is structured properly - Major effort to create jobs that are interesting and challenging Peopleare motivated by:  Needs for
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