- Psychological returns employeesbelieve they receive in heworkplace
- Recognition & status
- More transactional & includespay received directly as cash
- Cost of living adjustments
- Indirect total compensationbenefits
- Programs to helpwork/life balance
- Cash compensation: basepay
- The cash compensation anemployee receives for workperformed
- Reflects value of work/skills &ignores individual differences
- Pay expressed at an annualor monthly rate
- Pay expressed at an hourly rate
- Cash compensation: meritincreased & cost-of-livingadjustments
- Cash compensation: incentives
- INCENTIVES (VARIABLE PAY)
- One-time payments for meeting pre-establishedperformance objectives in a futuretime period
- Both incentives & meritincreases influence behaviourbut differ
- Incentives = futurebehaviour
- Can be based on individual or teambased, total business uni performance
- Performance objective may be expense reduction,volume increases, customer satisfaction, revenuegrowth, return on investments, increases in totalshareholder value, etc.
- Long-Term incentives
- Intended to focusemployees on multi-layeredresults
- Usually in the form ofstock ownership or optionsto buy stock at specified,advantageous prices
- The idea behind stockownership is thatemployees with a financialstake in the organizationwill focus on long termfinancial objectives asreturn on investment,market share, and returnon net assets
- Extended to different peopledepending on organization
- Key performers (magnainternational)
- Every employee (google,westjet, starbucks)
- Their hope is thatemployees will behave asthough they are owners
- Benefits: insurance &pensions
- Part of totalcompensation
- Some insuranceprograms are required bylaw (CPP, EI, WorkersComp)
- Some companies provideEEs with a pension plan inaddition to CPP
- Common benefits: health, dental, lifeinsurance and pensions are commonbenefits
- Benefits: work/life programs
- Programs that help EEs betterintegrate their work and liferesponsibilities
- Access to services to meetspecific needs
- Drug counseling, financialplanning, child/elder care
- Flexible workarrangements
- Non-traditional schedules, non-paidtime off,telecommunicating
- Appeals to changing workforcedemographics
- Benefits: allowances
- Compensation to provide foritems that are in short supply
- Japanese companiesoffer a rice allowance
- In Europe, managersexpect a car to be provided
- In China, housing (dormitories andapartments) and transportationallowance
- Companies who do notoffer this type ofcompensation must attracttalented employees inother ways
- The organization as a network ofreturns created by different forms ofpay
- Challenge: design network thatleads to success
- More useful if bonuses, developmentopportunities, promotions all worktogether
Wondershare EdrawMind
