Compensation and Benefits project
Assignment 1
Piu Pooja Jany Palma
1. Answer: The ways differing perspectives of society, managers, and employees affect the views of compensation are:
Society’s view
Manager’s view
Employee’s view
Pay as a measure of justice
Benefits as a reflection of justice in society
Job losses (or gains) attributed to differences in compensation
Belief that pay increases lead to price increases
A major expense
Used to influence employee behaviors and to improve the organization 's performance
Major source of financial security
Return in an exchange between employer and themselves
Entitlement for being an employee of the company
Reward for a job well done
2. Answer: The differences between base pay and performance pay are:
Base Pay
Performance Pay Base pay- salary or wage is the cash compensation an employee receives for the work performed.
Base pay tends to reflect the value of the work or skills and generally ignores differences attributable to individual employees.
For example; the base wage for machine operators may be $20 an hour.
It’s a financial reward system for employees where some or all of their monetary compensation is related to how their performance is assessed relative to certain criteria.
Performance pay is generally used where employee performance cannot be appropriately measured in terms of output produced or sales achieved.
For example; piece-rates and commission, performance related pay is a form of incentive pay.
3. Answer: The three tests that determine whether a pay strategy is a source of competitive advantage are:
Align- Is it ‘aligned’?
Differentiate- Does it ‘differentiate’?
Add value- Does it ‘add value’?
The first two tests- ‘align’ and ‘differentiate’ are easy to pass, but the last one- ‘add value’ is the most difficult. An organization’s compensation practices can have far-reaching effects on its competitive advantage. As compensation expert Richard Henderson notes, "To develop a competitive advantage in
Piu Pooja Jany Palma
1. Answer: The ways differing perspectives of society, managers, and employees affect the views of compensation are:
Society’s view
Manager’s view
Employee’s view
Pay as a measure of justice
Benefits as a reflection of justice in society
Job losses (or gains) attributed to differences in compensation
Belief that pay increases lead to price increases
A major expense
Used to influence employee behaviors and to improve the organization 's performance
Major source of financial security
Return in an exchange between employer and themselves
Entitlement for being an employee of the company
Reward for a job well done
2. Answer: The differences between base pay and performance pay are:
Base Pay
Performance Pay Base pay- salary or wage is the cash compensation an employee receives for the work performed.
Base pay tends to reflect the value of the work or skills and generally ignores differences attributable to individual employees.
For example; the base wage for machine operators may be $20 an hour.
It’s a financial reward system for employees where some or all of their monetary compensation is related to how their performance is assessed relative to certain criteria.
Performance pay is generally used where employee performance cannot be appropriately measured in terms of output produced or sales achieved.
For example; piece-rates and commission, performance related pay is a form of incentive pay.
3. Answer: The three tests that determine whether a pay strategy is a source of competitive advantage are:
Align- Is it ‘aligned’?
Differentiate- Does it ‘differentiate’?
Add value- Does it ‘add value’?
The first two tests- ‘align’ and ‘differentiate’ are easy to pass, but the last one- ‘add value’ is the most difficult. An organization’s compensation practices can have far-reaching effects on its competitive advantage. As compensation expert Richard Henderson notes, "To develop a competitive advantage in
References: Performance related pay. (n.d.). Retrieved February 8, 2015, from http://www.tutor2u.net/business/people/motivation_financial_performancepay.asp Reference for Business. (n.d.). Retrieved February 8, 2015, from http://www.referenceforbusiness.com/management/Em-Exp/Employee-Compensation.html#ixzz3QeZm2C3L UNC EHS Training: UNC Job Safety Analysis (JSA) Training. (n.d.). Retrieved February 8, 2015, from http://ehs.unc.edu/training/self_study/jsa/container.php?page=14 Hr online research presentation. (n.d.). Retrieved February 8, 2015, from http://www.slideshare.net/aaronphamilton/hr-online-research-presentation