What are the common bases for pay structure?
- Content of work
- Skills and knowledge needed to perform the work
- Relative value for achieving the org’s objectives
What is internal alignment?
The relationships between the jobs within a single org.
Equity theory: Perception vs. objective measure
Job structure should do what?
support and motivate behaviour towards the org’s strategy and workflow
What is pay structure?
The array of pay rates for different work or skills within a single org;the number of levels, and the criteria used to determine these differences create the structure.
What is workflow?
The process by which goods and services are delivered to the customer
Equity theory
my pay for my inputs vs. others pay for their inputs. How employees view the fairness of what they are paid in relation to other employees.
How do internal job and pay structures motivate employee’s behaviour?
By providing pay increases for promotions
more challenging work
greater responsibility
What is line of sight?
Ability of employee understand the links between his/her work and the co. strategy.
What is pay structure?
The array of pay rates for different work or skills within a single org. created through the use of:
- Number of pay levels
- Differentials
- Criteria
What is the pay differences between levels called and what is the intention behind it?
Differentials: to motivate people to strive for promotion to a higher paying level.
What types of things would qualify for a differential?
KSAs
Work conditions
Value of the job to the company
What must companies have before creating a pay structure?
Job structure
What is the most common bases for determining internal structures?
Content: tasks, behaviours, KSAs
Value: the relative contribution of a job to the org. objectives.
How are jobs ranked in content based structures?
On the bases of skill, complexity of tasks/responsibilities of the job.
How are jobs ranked in a value based structure?
On the relative contribution of the skills, tasks and responsibilities of a job to the org.
May include external market pressures or agreed rates through collective bargaining.
What is use value of the job reflect?
the value of goods and services an employee produces in a job.
What is exchange value?
What ever wage the employer and employee agree on for a job.
What does job-based structure look at?
Work contenct:Task, behaviour, responsibilities
What does person-based structure focus on
The employee: KSAs, competencies
What are the factors that shape internal structures?
- External factors: ie. economic pressures; govt. policies, laws, regulations; stakeholders; cultures, customs
- Organization factors: ie. strategy; technology; human capital; hr policy; employee acceptance; cost implications.
- Internal structure; ie. structure; levels; differentials; criteria.
What is marginal productivity theory?
That unless an employee can produce something of value from his/her job equal to the value received in wages, it will not be worthwhile for an employer to hire that employee.
What is human capital?
The education, experience, knowledge, abilities and skills that people posses.
How are organizations undergoing structural changes?
People who work at an org. are not employees (suppliers, temp staff, contractors)
Delayering: reduce unnecessary work that does not contribute to the org, and enlarge jobs.
What are internal labour markets?
Rules and procedures that determine the pay for different jobs within a single organization and that allocate employees to those different jobs - combine external and organizational factors.
The internal labour market refer to the rules and procedures that…
- determine pay for different jobs.
2. allocate employees to those jobs.
What are the dominant influences on pay for entry jobs?
External factors.
What are the strategic choices among structure options?
Tailored (well-defined jobs; small differentials) vs. loosely coupled (flexible jobs, adaptable, changing)
Egalitarian (Few levels; small differentials - flatter, teams, cooperation) vs. hierarchical (many levels; large differentials, tailored, supports individual performers, opportunities for promotion, more competitive)
What is tournament theory?
Effects motivation and performance - how big the difference between pay steps effects how motivated employees to achieve that next step - the bigger the step, the bigger the motivation. - Not good for team work environments
What is institutional theory?
Adoption of other company’s pay systems as best practices when they have little fit or value to the other company.
What are the consequences of pay structures?
Efficiency
Fairness
Legal Compliance
