HRM 3490 Lecture Notes - Lecture 1: Merit Pay, Operating Expense, Occupational Safety And Health
31 May 2021
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Chapter 1 - a roadmap to effective compensation. It is the single largest operating expenditure for many firms: compensation takes 40 -70% of operating budgets on compensation, canada employers spend nearly one trillion dollars on wages and salaries, another billion on employee benefits. Purpose of compensation system: create willingness among qualified people to join organization, perform tasks needed, motivation to work at the best of abilities. Compensation - behavioural perspective : compensation is one of the most powerful tools in the hands of management in encouraging desirable behaviours. The compensation strategy is one part of the reward strategy the plan for creating the compensation system. The compensation system has three main components: (1) base pay, (2) performance pay, and (3) indirect pay. Base pay is the foundation pay component for most employees and is generally based on some unit of time an hour, a week, a month, or a year.
