Managing Compensation

FUNDAMENTALS OF HUMAN RESOURCE MANAGEMENT

Mr. Noel Teves

GROUP IV:
Haycey Oliveros Showbe Enot
Jhane Estremadora

Kevin Alfonso Cesar Valencia III (Not Available)

References:
http://www.authorstream.com www.google.com.ph

MANAGING COMPENSATION

Compensation
 A total amount of the monetary and

non-monetary pay provided to an employee by an employer in return of work performed as required.  Pay is a statement of an employee’s worth by an employer.  Pay is a perception of worth by an employee.

Total Compensation

Direct
Wages / Salaries

Indirect
Time Not Worked
• Vacations • Breaks • Holidays

Commissions Bonuses
Gainsharing

Insurance Plans
• Medical • Dental • Life

Security Plans
• Pensions

Employee Services

• Educational assistance • Recreational programs

Strategic Compensation Planning
 Strategic Compensation Planning
 Links the compensation of employees to the mission,

objectives, philosophies, and culture of the organization.  Serves to mesh the monetary payments made to employees with specific functions of the HR program in establishing a pay-for-performance standard.  Seeks to motivate employees through compensation.

 Value-added Compensation  Evaluating the individual components of the

compensation program (pay and benefits) to see if they advance the needs of employees and the goals of the organization.

Common Strategic Compensation Goals:
1.
2. 3. 4.

To reward employees’ past performance
To remain competitive in the labor market To maintain salary equity among employees To mesh employees’ future performance with organizational goals

5. 6. 7.

To control the compensation budget To attract new employees To reduce unnecessary turnover

Pay-for-Performance Standard
 The standard by which managers tie compensation to

employee effort and performance.
 Refers to a wide range of compensation options,

including merit-based pay, bonuses, salary