Human Resource Management

Course Code: MGT350

Dr. Imran Shafique

 Lecture Outline

1. Organizational Reward System

2. Job Satisfaction and Rewards

A. Determinants of Job Satisfaction/Dissatisfaction
3. Employee Compensation
1. Compensation Policies
2. Pay Secrecy
3. Govt. & Union Influence
4. Pay Equity
Determinants of Job Satisfaction/Dissatisfaction
 Employee Compensation

All the extrinsic rewards which an employee receive in

exchange for his/her work:

1. Base Wage/Salary
2. Any incentive/bonus
3. Any other benefit
 Employee Compensation
1. Pay
Actual Money an employee receive against his/her work
2. Base Wage/Salary
Hourly, Weekly, Monthly, pay that employee receive for their work
3. Incentives
Rewards offered in addition to the base wage/salary and usually
directly related to performance
1. Benefits
Rewards employees receive as a result of their
employment/position with the organization (Paid
vacations, health insurance, & retirement plans)
Employee Compensation
 Compensation Policies
1. Compensation policies must deal with following issues:
I. Min. & max. pay levels – Take into consideration
A. Worth of job to organization
B. Organization’s ability to pay
C. Government regulations
D. Union influences
E. Market pressures
II. Nexus among pay levels (e.g., b/w senior & operating
management, operative employees & supervisors)
III. Division of total compensation money (i.e., what portion
goes into base pay, incentive programs, and benefits)
 Pay Secrecy
1. To NOT disclose pay-related information
a) Pay system and individual pay
2. Justification
a) To avoid any discontent
b) Many employees – nobody else’s business
3. Drawbacks
a) Difficult for employees to determine whether pay is
related to performance and does not eliminate pay
comparisons
b) May cause employees to overestimate pay of their peers
and underestimate pay of their supervisors
c) Can create feelings of dissatisfaction
d) Employees may become suspicious
 Govt. and Unions Influence
1. Government’s Rules & Regulations

2. Union Agreements/Influence
 Pay Equity
1. Pay Equity
Employees believe they are being fairly paid

1. Dimensions of Pay Equity

1. Internal Equity

2. External Equity

3. Individual Equity

4. Organizational Equity