HRM303 Chapter Notes - Chapter 4: Job Evaluation, Fixed Cost, Nepotism

• School: University of Waterloo
• Department: Human Resources Management
• Course: HRM303
• Professor: Vince Di Ruzza

Document Summary

Portion of an individual"s compensation that is based on a unit of time worked. Guaranteed by the employer; if a person works for a certain amount of time, he or she is paid a prespecified amount of money. Wage: pay based on an hourly time period. Salary: pay based on a weekly, monthly, or annual time period. Substitution of output related pay for time based pay is only feasible for jobs in which output it: Easy to price in terms of its value to the employer. Based pay allows employer to recognize and encourage important job behaviours that don"t directly produce output. Base pay can signal relative importance of jobs within organizations. Base pay demonstrates commitment on part of the employer to the employee, creating greater likelihood of employee commitment to employer. Base pay can support a particular managerial strategy. Usually much simpler to implement/administer than output related system.