Professional Documents
Culture Documents
Reward Systems
Reward Systems
Intrinsic Rewards
Status Growth Responsibility
Extrinsic Rewards
Non-financial (office, staff, title, etc.)
Financial (direct and indirect compensation)
Financial Rewards:
Indirect Compensation
Protection Programs
Public
Private
Incentives
Merit Pay
Compensation System
Objectives
External Competitiveness
Internal Equity
Legal Compliance
Motivational Soundness
Linkages to Performance
Cost Effectiveness
Culture Creating
Total Comp Policy Planning:
Key Issues
1. Degree of income protection and replacement
to be provided for employees, for dependents
and for retirees.
2. Provisions (if any) to be made for income
supplementation benefits.
3. Relation of benefits to job level.
4. Recognition for seniority.
5. Recognition for performance or productivity.
6. –Er’s responsibility for costs of –ee benefits,
dependent benefits, and retiree benefits.
7. Basis and use of external comparisons.
8. Effect of union settlements on benefits for non-
represented employees.
9. Application of plans to –ees of acquired orgs.
10. Coverage for part-time employees.
11. Employee choice and plan flexibility.
12. Responsibility for planning and managing
the plans/programs.
Compensation Laws & Regs
Wages Wage Controls
Payment Schedules Pay Increases
Overtime Incentive Pay
Wage Adjustments (longevity, education, etc.)
Bonuses Contracts
Work Agreements Child Labor
Benefits
Basic Compensation
Markets
Blue Collar – “Labor”
Professional
OPTIONS:
1. Flat Rates
2. Pay Ranges
Pay Considerations
Lead Competition
Match Competition
Lag Competition
Wage Structure Decisions
Ranking
Classification
Point/Factor
Wage Structures
Rankings
Each job in relation to other from most
important to least important
Classification
Jobs sorted by requirements, responsibilities
Point/Factor
Jobs evaluated and sorted by objective
factors
Ranking System
Job A - President
Job B – Vice President
Job C1 – Treasurer/CFO
Job C2 – Manager of Operations/COO
Job D – Sales Manager
Job E – Salesperson
Job F – Order Entry Clerk
Job G – Cleaning Crew Member
Classification System
Grade Step Step Step Step Step Step Step
1 2 3 4 5 6 7
1 15,625 16,146 16,666 17,183 18,009 19,039 19,543
Percentage Increases
across the board, competitive percent
Incentives
Levels of Incentives
Individual
Group
Company-wide
Executive
Individual Incentive Plans
Piecework Payment
(Straight and Differential)
Standard Hour
Commissions
Bonuses
Skills-based Pay
Non-financial Awards
Group Incentive Plans
Piece-rate Systems
Group Bonuses
Profit Sharing
Company-wide Incentives
Profit Sharing
(Cash Plan or Deferred Plan)
Gainsharing
Stock Options
Directors’ Fees
Perquisites
Executive Compensation
Salary Long-term Company
Organization & Bonus Comp Performance
Boeing 2,684,000 1,245,000 -128%