HRCP Unit 4: Compensenation and Benefits
PHRi 04 Compensation, Benefits, and Work Experience
HRCP Unit 4: Compensenation and Benefits
PHRi 04 Compensation, Benefits, and Work Experience
Topic 1: Total Rewards: Financial and Non-financial
Topic 2: The Wage-level Decision
Topic 3: Job Evaluation Methods
Topic 4: Job Pricing and Pay Rate Administration
Topic 5: Economic Factors Affecting Compensation
Topic 6: Incentive Compensation Systems
Topic 7: Executive Compensation
Topic 8: Employee Benefit Programs
Topic 9: Managing Employee Benefit Programs
Topic 10: Evaluating Strategy & Program Effectiveness
Topic 11: Compensation Laws and Regulations
4.1.2 Ethical Considerations in Compensation
(What is just and fair)
4.1.3 Determinants of Pay
4.1.4 Three Wage Decisions
4.2.1 Establishing the Wage Level
4.2.2 Factors Influencing the Wage-level Decision
4.2.3 Compensation Surveys
4.2.4 Using Compensation Survey Data
4.1.1 Strategic Objectives of compensation
Compensation administration is a strategic HR function that has a significant impact on other HR Functions. HR functions are influenced by compensation and viceversa
The 3 major components are: base pay, incentives, and benefits
All pay decisions should satisfy these 6 objectives:
A wage-level policy is expected to achieve three objectives:
1.Attract an adequate supply of labor
2.Keep present EEs : 😃 with $
3.Avoid costly turnover
Wage-level changes have a small effect con org effectiveness
4.3.1 Ranking Method
4.3.2 Classification/Grading Method
4.3.3 Point Method
4.3.4 Factor Comparaison Method
4.3.5 Guide Chart-Profile Method (Hay Method)
4.4.1 Pay Grdes and Pay Ranges
4.4.2 Red-Circle Job Rates
4.4.3 Adjustments for Economic Conditions
4.4.4 Individual Pay Rate Determination
4.4.5 Reflecting Geographic influences in Pay Structures
4.4.6 Expatriate Allowances
4.4.7 Establishing Administrative Controls
4.5.1 Inflation
4.5.2 Interest rates
4.5.3 Industry Competition
4.5.4 Foreign Competition
4.5.5 Economic Growth
4.5.6 Demographic Trends
Two Methods:
4.6.1 Money and Motivation Theories
4.6.2 Individual Incentives
4.6.3 Skill and Knowledge Base Pay
4.6.4 Differential Pay
4.6.5 Group and Team Incentives
4.6.6 Organization-wide Programs: Profit sharing and Gainsharing
4.6.7 Strategic Alignment of Base Pay and Incentive Pay
It explains the relationship between effort, performance, and rewards (outcomes). And it depends on:
1.Expectancy (perceived relationship between effort and performance)
2.Instrumentality (perceived relationship between performance and outcomes)
3.Valence (value of outcomes)
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People are motivated to exert effort if by doing so, they can perform well and attain desired outcomes
4.7.1 Salaries
4.7.2 Executive bonus plans
4.7.3 Stock Options
4.7.4 Nonfinantial Rewards
4.7.5 Director Pay
4.8.1 Pensions
4.8.2 Health and Accident Insurance
4.8.3 Income Replacement
4.8.4 Employee Services
4.8.5 Pay for Time Not Worked
4.8.6 Recognition and Achievement Awards
4.9.1 EE Benefits Philosophy, Planning and Strategy
4.9.2 EE Benefit Preference Surveys
4.9.3 Cost-Benefit Analysis and Cost Management
4.9.4 Communicating Benefit Programs
Cents-per-hour: divides the total annual cost per EE by the # of hours worked per year
Benefit Plan Audits: companies should audit plans regularly (eligibility and claims audits)
4.10.1 Budgeting
4.10.2 Assessment of Methods and Processes
4.11.1 Compensation Laws and Regulations
Motivation and Financial Incentives (Reinforcement theory)