COMMERCE 2BC3 Lecture 28: Week 10 – Compensation and Benefits
1 Nov 2016
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Document Summary
Strategic issues in compensation: establishing base pay, performance-based pay, pay equity, benefits. Batter employer, better quality: compensation costs are single largest cost category in most firms. Up to 80% in service organizations such as colleges & universities. Pay is a statement of an employee"s worth by an employer. Pay is a perception of worth by an employee. Pay carries a great deal of information about what the organization values. The optional strategy is one that adds the most value to the firm. This may not be the lowest cost. Benefits can be up to 50% of the total cost. If you are not working, you are not getting paid. Wage is paid per hour, salaries are paid per longer period or per year. Designing a compensation system: considerations in developing a compensation plan. Individual pay: egalitarianism vs. elitism, performance vs. Membership: monetary vs. non-monetary rewards, open vs. secret pay, centralization vs. decentralization of pay decisions.
