Compensation

Copyright 2001 David A. Wheeler, Ph.D., PHR, CMT NoStress@mail.com   Last updated 09/19/05 01:54 PM

File: compensation.htm

Strategic Reasons for Compensation

  • Attract

  • Motivate

  • Retain

Job Evaluation: the process of determining value of a job

  • Survey of external market

  • Job Ranking

  • Classification**

    • Pay range

  • Factor Comparison

    • Compensible Factors **

  • Point Factor System

  • Hay Method

Direct Pay

Base Pay

Hourly (usually nonexempt)

Salary (usually exempt)

Commission: percent of sales

Base plus commission

Base plus tips

Skill-Based (knowledge Based)

Piece Rate

Merit System based on performance evaluations

Gainsharing - when productivity improves

Profit Sharing - profits split among workers

Bonus Payment - not tied to company performance but to whim of management

Indirect Pay and Benefits

Legally Required

  1. Social Security

  2. Unemployment Compensation

  3. Workers Compensation

Supplemental Income

Defined Benefit: Guaranteed Payout

Defined Contribution

Pension 401(k), 403(b)

ESOP

Stock Purchase Plans

Stock Options

Healthcare

Life Insurance

Childcare/Eldercare

Transportation

Health clubs

Tuition Reimbursement

Cafeteria Plans (Flexible benefits)

Pay for Time not Worked

NonFinancial Rewards

Personal Work Factors

Physical Conditions

Management Styles

Company Image

Perquisites of the Job

 




 

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Last modified: 10/04/05