II. Human Resource Management课件.ppt

2. Compensation ContractsHow can the Performance of an Employee be Measured? Objective Performance Measure: Measure that is easily observable and quantifiable, e.g. parts produced, hours worked etc. Subjective Performance Measures: An evaluation which is based on personal opinion of a supervisor, customer, peers, etc. Type of evaluat. Database objective subjective Output revenue, dividend customer satisfaction Input time qualification 精品文档 Basis Variables for output-based pay Quantity of production pieces, weight, size/height Quality of production Rejects, grade, customer‘s satisfaction, individual targets Input reduction Reduction of input factors: raw material, energy, work time Capacity utilization slack-, repair- and waiting periods Be on schedule Timeliness vis à vis internal and external customers Value of the firm stock price, economic value added 2. Compensation Contracts Examples of Different Variables as a Basis of Output-Related Pay 精品文档 Advantages of output-based pay Selection effect Motivation effect efficient workers with a high  productivity will join the firm/stay inefficient workers with a low  productivity will not join/leave the firm output-based pay motivates workers  to put forth more effort 3. Output-Based Pay Source: www.kone.fi 精品文档 World Book Britannica Offered compensation scheme variable pay: W = $ 100 . x fixed salary: W = $ 500 Labor costs of 10 sets; Cost per set $ 1,000 ? $ 100 per set $ 500 ? $ 50 per set What type of salesperson will stay with the firm? high productive sp.x ? 5 low productive sp.x ? 5 Labor costs of 3 sets; Cost per set $ 300 ? $ 100 per set $ 500 ? $ 166,67 per set 3. Output-Based Pay Selection Effect: An Example of Compensating Salespeople 精品文档 500 A (World Book) B (Britannica) W ...Weekly Pay x ... Number of encyclopedia 5 3 300 ? Higher-productivity workers will leave Britannica,  because they will earn more at World Book. Only lower-productivity workers will  stay at Bri