Ch 4 1 To develop and operate a compensation system that promotes fair treatment, an organization should consider such compensation strategies as: l Relating.

Presentation on theme: "Ch 4 1 To develop and operate a compensation system that promotes fair treatment, an organization should consider such compensation strategies as: l Relating."— Presentation transcript:

1 Ch 4 1 To develop and operate a compensation system that promotes fair treatment, an organization should consider such compensation strategies as: l Relating job worth to differences in job requirements. l Recognizing the worth and value of employee knowledge and skills. Organizational Structure

2 Ch 4 2 Strategic Compensation Issues l Rewarding employee contributions and the results achieved. l Promoting employee continued acquisition and upgrading of knowledge and skills. l Supporting team and work-unit cooperative efforts. l Designing compensation plans that successfully compete within established labor markets.

3 Ch 4 3 Strategic Compensation Issues l Aligning compensation of all employees with objectives and goals of the organization. l Providing a compensation package that enhances current lifestyles and provides long- term protection for employees and their dependants.

4 Ch 4 4 Organizational Characteristics l Purpose To provide a good or service of value to customers or clients. l Division of Labor The assignment of different tasks to different people acting individually or in groups. l Hierarchy of Authority Level-by-level arrangement of managers in order of increasing authority.

5 Ch 4 5 Development of an Organization l Establish a Philosophy Establishes general guidelines for decisions and actions to be taken by all members - it describes the values of top management or the leaders of the organization. It provides standards.

6 Ch 4 6 l Identify the Mission Describes in broad or general value-laden terms what the organization wishes to accomplish in the long-term...the kind of product it tends to provide and how it intends to provide it. It identifies desired results. Develop Cont.

7 Ch 4 7 l Develop Policy Broad guidelines for directing the actions of employees. It must be sufficiently broad to relate to different actions and behaviors required of the various work groups and members of the organization, and it must support the mission of the organization. Develop cont.

8 Ch 4 8 l Determine Objectives and Goals Identifies specific output requirements and establishes the levels of performance needed to accomplish the mission. It is a transition point from strategic to tactical considerations where the organization must determine the most efficient and effective means of accomplishing its mission. Develop cont.

9 Ch 4 9 l Define Work Unit Activities Identifies the principle activities of the work unit - it further assists in integrating the top-down established organizational objectives and goals with the assignment of each work unit. Develop cont

10 Ch 4 10 l Group Tasks into Jobs *Work unit activities become segregated and assigned to specific individuals. *These activities become further identified as the tasks, duties, and responsibilities of a job. *Specific knowledge and skill requirements are identified along with a variety of environmental conditions that make additional demands on the workers. Develop cont.

11 Ch 4 11 l Pay Satisfaction People make decisions about pay based on comparisons with others. l Job Satisfaction People want meaningful work, an opportunity for recognition, reward, and advancement. Satisfaction And Individual Performance

12 Ch 4 12 l Organizational Satisfaction People want to be secure in their work, treated fairly, and philosophically aligned with the organization Satisfaction cont.

13 Ch 4 13 Organizational Hierarchy Board of Directors Establish policy...identify organizational and strategic missions...select senior management and monitors their performance. Chairman of the Board Inside and Outside Members

14 Ch 4 14 Senior Management Responsible for the proper organization and operation of the firm. Responsible for setting organizational objectives, establishing operating polices, and defining operating plans. l President (CEO) (COO) l Executive/Senior Vice Presidents Organizational Hierarchy

15 Ch 4 15 Organizational Hierarchy Operating Managers Responsible for meeting daily quality, quantity, and timeliness standards in the goods and services produced in their units. l Division Heads (VP’s) (GM’s) l Department Heads l Plant Managers l Professionals and Administrators l Intermediate and First Line-Supervisors

16 Ch 4 16 Sales Personnel Responsible for presenting the output of the organization to potential customers. * Compensation methods for sales personnel vary from salary only, sales commission only, salary and commission, salary and bonus, and a combination of salary, bonus, and commission. Organizational Hierarchy

17 Ch 4 17 Organizational Hierarchy Sales Personnel l Direct customer contact l Customer service l Sales support l Indirect sales l Market analysts

18 Ch 4 18 Organizational Hierarchy Professionals Their work normally involves the solution of complex technical problems that vary widely and may have a broad range of interpretations. Normally they hold at minimum an undergraduate degree and may be required to have a license or certificate to practice.

19 Ch 4 19 Professionals l Engineers l Attorneys l Scientists l Accountants Organizational Hierarchy

20 Ch 4 20 Organizational Hierarchy Operative Employees Make up approximately 75% of the workforce. These employees perform assignments that range from those given by a few specific and easily understood oral instructions to those requiring knowledge of specific skills and trades.

21 Ch 4 21 Organizational Hierarchy Operative Employees l Paraprofessionals / Technicians l Administrative support l Skilled craft workers l Semi-skilled workers l Unskilled workers

22 Ch 4 22 Employee Groupings And Classifications l Line and Staff l White * Blue * Pink collar l Union and nonunion l Exempt and nonexempt l Regular and Temporary l Full-time and Part-time

23 Ch 4 23 Exempt - Nonexempt Employees Under both state and federal (FSLA) statute employers are required to compensate all workers who are not otherwise exempt, overtime pay for all hours worked in a given work week or day that exceeds a specified number of hours...subject to special exceptions and conditions.

24 Ch 4 24 Exempt - Nonexempt Employees Subject to established standards the law provides exempt status for EXECUTIVES ADMINISTRATORS PROFESSIONALS SALES PERSONNEL FARM WORKERS INTERSTATE TRANS- WORKERS

25 Ch 4 25 Regular and Temporary Employees l Regular Employee any person hired for a specific job who is expected to work on a continuing basis and meet certain minimum performance and time- on-job requirements.

26 Ch 4 26 Regular and Temporary Employees l Temporary Employee Any person hired for a special project, or on an as-needed basis, or for seasonal work, or for any kind of work of a temporary or casual nature. l Part-time employee Typically any person working on a continuing basis who works less than a full-time employee.

27 Ch 4 27 Pay Relationships l Pay Equity Are you paid a Fair wage? Is there pay equity in the workplace among all the members of the workforce? l Pay Ratios The relationship of executive pay to the pay of lower-level employees in the same organization.