Presentation is loading. Please wait.

Presentation is loading. Please wait.

Chapter 1 The Pay Model.

Similar presentations

Presentation on theme: "Chapter 1 The Pay Model."— Presentation transcript:

1 Chapter 1 The Pay Model

2 Contrasting Perspectives of Compensation
Society’s Views Stockholders’ Views Employees’ Views Managers’ Views

3 Exhibit 1.1: Hourly Compensation Costs for Production Workers (2005 data)
United States $23.65 Brazil Canada Mexico Australia Hong Kong Japan South Korea ($8.23 in 2000) Singapore Sri Lanka * (2004 data, comparable to China) Taiwan Austria Belgium Czech Republic ($2.83 in 2000) Denmark Finland France Germany Hungary ($2.79 in 2000) Ireland Italy Netherlands Norway Poland Portugal Spain Sweden Switzerland United Kingdom Hourly compensation costs include (1) hourly direct pay and (2) employer social insurance expenditures and other labor taxes.

4 Exhibit 1.2: Labor Costs as a Percentage of Revenues, Airline Industry

5 What Is Compensation? Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship.

6 Exhibit 1.3: Total Returns for Work

7 Exhibit 1.5: THE PAY MODEL EFFICIENCY Performance Quality Customers
POLICIES TECHNIQUES OBJECTIVES ALIGNMENT Work Descriptions Evaluation/ analysis certification INTERNAL STRUCTURE EFFICIENCY Performance Quality Customers Stockholders Costs FAIRNESS COMPLIANCE COMPETITIVENESS Market Surveys Policy PAY definitions lines STRUCTURE CONTRIBUTORS Seniority Performance Merit INCENTIVE based based guidelines PROGRAMS MANAGEMENT Costs Communication Change EVALUATION

8 Caveat Emptor - Be An Informed Consumer
Does the research measure anything useful? Does the study separate correlation from causation? Are there alternative explanations?

9 Listening to HR’s Critics
Quantify people-management results into dollars Productivity of workforce Cost of vacant position Cost of keeping bad manager Dollar impact of hiring and keeping top performers vs. average ones in mission-critical jobs Adopt “fact-based” decision-making Not “I think” or “I believe” but “I know” re: cause and effect Causes of turnover What motivates workers to produce more Which HR actions can turn business unit around Source: Workforce Management, 7/31/06

Download ppt "Chapter 1 The Pay Model."

Similar presentations

Ads by Google