SCHOOL OF BUSINESS

ASSIGNMENT COVER SHEET

STUDENT DETAILS

Student name: NGUYEN THI THU THAO Student ID number: B1111915045

UNIT AND TUTORIAL DETAILS

Unit name: HRM1 Unit number: 1

Tutorial group: 4 Tutorial day and time:
Lecturer or Tutor name: Dr. Le Thi Thanh Xuan

ASSIGNMENT DETAILS

Title: Individual reading for session 12

Length: 538 words Due date: 11/12/2020 Date submitted: 11/12/2020
Home campus (where you are enrolled):

DECLARATION

I hold a copy of this assignment if the original is lost or damaged.

I hereby certify that no part of this assignment or product has been copied from any other student’s work or from
any other source except where due acknowledgement is made in the assignment.
I hereby certify that no part of this assignment or product has been submitted by me in another (previous or
current) assessment, except where appropriately referenced, and with prior permission from the Lecturer /
Tutor / Unit Coordinator for this unit.
No part of the assignment/product has been written/produced for me by any other person except where
collaboration has been authorised by the Lecturer / Tutor /Unit Coordinator concerned.
I am aware that this work will be reproduced and submitted to plagiarism detection software programs for the
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checking).

Student’s signature: THAO

Note: An examiner or lecturer / tutor has the right to not mark this assignment if the above declaration has not been
signed.

ARO 00380 08/15

Chapter 11: Establishing a pay structure
1. Decision areas and concepts in employee compensation management
- Pay is a powerful tool for meeting the organization’s goals
- Salary level decisions include: pay structure and individual pay
- Pay structure entails a consideration of pay level and job structure
2. Equity Theory and Fairness
- Equity theory suggests that people evaluate the fairness of their situations by comparing
them with those of other people

Types of employee social

comparisons of pay

External equity pay Internal equity pay

comparisons comparisons

Focus on what employees Focus on what employees

in other organizations are within the same
paid for doing the same organization, but in
general job different jobs, are paid
3. Developing Pay Levels
a. Market pressure
- 2 important competitive market challenges: product market competition and labor market
competition

Product Organizations compete on quality, service, and

price
Cost of labor is a significant part
markets
Labor Organizations compete to obtain human
resources
Create minimum to the amount organizations
markets pays for hiring people

b. Employees as a resource
- Employees are considered a resource for organizations to invest
- Pay policies and programs are one of the most important human resource tools for
encouraging desired employee behaviors
 c. Deciding what to pay
- Pay at rate set by market
- Pay at a rate above market
- Pay at a rate below market
d. Market pay survey
- Using benchmarking
- Problems need to be clarified are: Which employers should be included in the survey ?,
Which jobs are included in the survey?, If multiple surveys are used, how are all the rates of
pay weighted and combined?
- Rate Ranges: The use of rate ranges permits a company to recognize differences in
employee performance, seniority, training, and so forth in setting individual pay
- Key Jobs and Nonkey Jobs: key jobs are common and nonkey jobs are unique in
organizations
e. Developing a job structure
Job evaluation  Job structure
f. Developing a pay structure

Job Pay rates

Pay
evaluation grades

Pay
Job Pay
policy
structure ranges
line

Define Pay Pay

key jobs survey structure

g. Current Issues in Pay

- Pay During Military Duty
- Pay for Executives
 Chapter 12: Recognizing Employee
Contributions with Pay
1. Connection between incentive pay and employee performance.
- Incentive effect: the effect of pay plans on current employees

- Three additional theories also help explain the effects of compensation: reinforcement,
expectancy, and agency theories.
2. Effective Incentive Pay
- Organizations may recognize individual performance through such incentives as piecework
rates, standard hour plans, merit pay, sales commissions, and bonuses for meeting
individual performance objectives.
- Pay for Group Performance includes: Gainsharing, Bonuses, Team Awards
- Types of Pay for Organizational Performance: Profit sharing, Stock options, Employees Stock
ownership plans.
- Balanced Scorecard: the basis for awarding incentive pay
4 categories of balance scorecard:

Learning
Financial Customer Internal
and growth

- Processes That Make Incentives Work are: Participation in Decisions and Communication
- Incentives for meeting organizational objectives include profit sharing and stock ownership
 Chapter 13: Employee Benefits
1. Role of Employee Benefits: motivating employees, maintaining economic security, imposing
significant costs

Worker's
Unemployment Family and
Social security compensation Health care
insurance insurance medical leave

2. Benefits Required by Law

3. Optional Benefits Programs

- Group Insurance (Medical Insurance, Life Insurance, Disability Insurance, Long-Term Care
Insurance)
- Paid Time Off
- Domestic Partners

- Retirement Plans
• Contributory plan: retirement plan funded by contributions from employer and employee.
• Non-contributory plan: retirement plan funded entirely by employer contributions.
- “Family-Friendly” Benefits (Family Leave, Child Care Benefits, College Savings Plans, Elder
Care)
- Other Quality of Work-Life Benefits

4. Selecting Employee Benefits

- Should take into account:
Organization’s goals, objectives and budget
Expectations of the organization’s current employees and potential future recruits.
5. Legal Requirements for Employee Benefits
- Benefits required by law

- Tax treatment of benefits

- Antidiscrimination laws
- Accounting requirements