COMMERCE 2BC3 Lecture Notes - Lecture 8: Motivation, Equity Theory, Job Evaluation
2 Feb 2016
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Pay structure: relative pay of different job (job structure) and how much they are paid. Pay level: average pay of jobs in an organization (including wages, salaries, benefits) Job structure: relative pay of jobs within a firm (e. g. same job/different firm may have different pay) Goals of compensation are to: attract, retain and motivate talented employees. Compensation costs are the single largest cost category in most firms (60% in some manufacturing firms and up to 80% in service firms e. g. college/universities) If so, based on individual, team, organizational performance? o. The optimal strategy is one that adds the most value to the firm [this may not be the lowest cost] Equity theory says that people evaluate the fairness of their situation by comparing them with those of other people. Most employees prefer a situation where there is equity (e. g. if i do the same thing as jim, work as hard, and get paid the same, then there is equity. )
