Compensation University of Texas at Arlington在阿灵顿补偿德克萨斯大学.pptVIP

Compensation The Importance of Compensation Impacts an employer’s ability to attract and retain employees. Ensure optimal levels of employee performance in meeting the organization’s strategic objectives. Compensation’s components Direct compensation in the form of wages or salary Base pay (hourly, weekly, and monthly) Incentives (sales bonuses and or commissions) Indirect compensation in the form of benefits Legally required benefits (e.g., Social Security) Optional (e.g., group health benefits) Theory Behind Compensation Equity Theory Comparing inputs and outputs of a similar co-worker Perceived inequity affects employee effort Expectancy Theory People are motivated by intrinsic and extrinsic outcomes they desire. People will only be motivated if outcome is possible. People will only be motivated if outcome is contingent. Equity Theory Internal equity Comparison of my input / reward ratio with that of similar others. Employees may seek to address imbalance by changing their inputs. Fairness of pay differentials between different jobs in the organization can be established by job ranking, job classification, point systems and factor comparisons. External equity Fairness of organizational compensation levels relative to similar jobs in other organizations. “Monkeys Demand Equal Pay” A recent study shows brown capuchin monkeys refused to play along when they saw another monkey get a better payoff for performing the same work. The monkeys were trained to trade a granite token for a piece of cumber. When the reward was the same for both monkeys, they took the cucumber 95 percent of the time. But it was a different story when one monkey was given something better -- namely, a grape. Then, the other monkey often pitched a fit -- either throwing the token, refusing to eat the cucumber or giving it to the other monkey. Associated Press 2003 Equity Theory Fairness about pay differentials among individuals who hold the same job can be established by using: Senio