Textbook Notes (368,064)
Canada (161,611)
York University (12,801)
HRM 3490 (10)
Ping Peng (10)

Components of Compensation Strategy

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Human Resources Management
HRM 3490
Ping Peng

Chapter 4In designing any compensation strategy two key questions must be addressed1What role should each of the three compensation components base pay performance pay indirect pay play in the compensation mix2Answered in Chapter 5Base PayThe portion of an individuals compensation that is based on time worked not on output produced or results achieved For majority of Canadians serves as the largest component of compensation packageGuaranteed by the employerWhen calculated hourly wage weekly monthly or annually salaryAdvantages of Base Pay1Flexibility2Doesnt confine employee attention to only one or two behaviours3Allows employer to recognize and encourage important nonoutputbased job behaviours such as skill development4Can signal relative importance of jobs within the organization5Demonstrates a commitment on the part of the employer to the employee6SimplicityDisadvantages of Base Pay1Linked to variability in an employers ability to pay2Does not directly motivate task behaviour3Does not directly contribute to citizenship behaviour4Is not selfcorrecting
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