ADMS 3490 Lecture 3: STUDY NOTES 03 COMPENSATION COMPONENTS

• School: York University
• Department: Administrative Studies
• Course: ADMS 3490
• Professor: Paul Dennis

Document Summary

Advantages: flexible, encourage job behaviours, signal relative importance of jobs, demonstrates a commitment, support a particular managerial strategy, simplistic. Advantages: signal key behaviors and motivate employees, can reduce the need for other types of mechanisms for controlling employee behaviour, set performance standards, support specific managerial strategies, make pay more variable. Disadvantages: employees prefer predictable, may require higher compensation, may cause focus only on rewarded behaviors, may cause unanticipated consequences, usually more complex than base pay. Advantages: can help attract employees, matches unionized firms, favourable tax treatment, economies of scale in purchasing, can provide valued rewards for no cash, provide employee peace of mind, can help promote company products, can support managerial strategy. Disadvantages: cost can be substantial, rigidity, difficult to develop efficient benefits package, administration and communication costly, does not motivate task behavior, may cause excessive employee stability, may encourage undesirable behaviour.